Union Cabinet approves spectrum base price and other auction terms

The Union Cabinet on Wednesday approved the base price and other auction terms for the upcoming sale of airwaves, likely to start in August.

The approval from the Cabinet will kick-start the process of the biggest spectrum auction so far, from which the government can fetch Rs 5.36 lakh crore, if all the airwaves are sold at base price.

It has already been decided that for the spectrum acquired in upcoming auctions, a spectrum usage charge (SUC) of 3% of adjusted gross revenue will be charged from mobile operators whereas a weighted average formula will be applied for calculating the SUC on total spectrum holding for all bands.

The government is auctioning 700 MHz for the first time, for which regulator TRAI had recommended a record high base price of Rs 11,485 crore per Mhz. If all available airwaves under this band get sold, it will yield a whopping Rs 4 lakh crore.

However, industry players have termed the price too high and had also sought to defer the sale of this band citing lack of ecosystem.

The government expects revenues to the tune of Rs 98,995 crore from communication services in 2016-17, which includes proceeds from spectrum auction and other fees levied by DoT.