Telecom spectrum auction for 8 bands starts from May 20, says DoT

10,523 MHz up for sale, reserve price of spectrum is Rs 96,317 cr

Auctions for eight high-frequency spectrum bands will begin on May 20, the Department of Telecommunications (DoT) announced on Monday, inviting bid applications from telecom operators.

The last date for submission of bids is April 22. Applications for entering the auctions come with a non-refundable processing fee of Rs 1 lakh. The bids made would be valid up to September 30.

On February 8, the Union Cabinet approved the auction of 10,523.15 megahertz (MHz) of spectrum across bands at a reserve price of Rs 96,317.65 crore. All unsold spectrums from the last sale will be up for bidding again. Airwaves in the 800, 900, 1800, 2100, 2300, 2500, 3300 MHz and 26 GHz bands, covering a large chunk of voice and data spectrum, are up for sale.

While the live e-auction of airwaves across major spectrum bands will be held 73 days from now, a long timeline of steps leading up to it has been released by the DoT. This includes the pre-qualification of bidders on May 6, the inauguration of the final list of bidders on May 9, and a mock auction on May 13 and 14, the DoT notice said.

Telecom companies will have the right to use the spectrum for 20 years from the date of frequency assignment. If the same licensee who is holding the spectrum wins the spectrum, this would be the day following the expiry date of the earlier assignment.

All entities which have a unified access licence (UAL), or fulfill the conditions for receiving one can participate in the auctions. Issued by the government, the licences allow wired and wireless technologies to work together as a single, robust network.

While a unified licence can only be awarded to an Indian firm, foreign applicants may form or acquire an Indian company, to obtain it. Foreign entities are allowed to participate in the auctions directly and apply for a licence through the Indian company, where they can hold 100 per cent equity stake under the automatic route for foreign direct investment. However, restrictions remain on investments from countries sharing a land border with India.

New entrants into the telecom space will also be required to show a net worth of Rs 100 crore per licence service area, including Rs 50 crore each for Jammu & Kashmir and North East Service Areas, in which the bidder wants to submit bids. The rules mandate that licence holders who currently do not hold spectrum will be treated as new entrants.

Analysts have pointed out that the higher frequency bands are expected to command a lower price, similar to the last auction. And, airwaves in the 800 MHz, and 2300 MHz bands are likely to get a tepid response, given that they had received no bids last time.

In the last round of auctions on August 1, 2022, the government had put up 72,098 MHz of 5G spectrum capable of offering ultra-high speed mobile internet connectivity. Of this, 51,236 MHz or 71 per cent of the total was sold with the bid amounting to Rs 1.5 trillion.