The Union Cabinet on Wednesday approved the auction of 2,251.25 megahertz of spectrum with a reserve price of ₹3.92 lakh crore, a move that should help boost the quality of 4G telecom services in the country.
Spectrum in the frequency bands of 700MHz, 800MHz, 900MHz, 1,800MHz, 2,100MHz, 2,300MHz and 2,500MHz would be offered for 20 years, said Communications Minister Ravi Shankar Prasad.
He said the notice inviting applications would be issued this month and the auction conducted by March 2021.
Network boost
“By winning right to use spectrum through the auction, incumbent telecom service providers will be able to augment their network capacity, whereas new players will be able to start services,” the government said.
Mr. Prasad said the conditions for the auction would be the same as those during the last round in 2016.
Bidders will have to comply with conditions, including block size, in which bidders will be able to submit their bids, spectrum cap or the maximum amount of spectrum that can be held by a bidder after completion of auction, roll-out obligations and payment terms.
Successful bidders would have the option of paying the entire amount upfront or a certain amount in 16 equated annual instalments after a two-year moratorium, it said. They would also have to pay 3% of the adjusted gross revenue, excluding wireline services, as the spectrum usage charge.
The auction would help boost spectrum availability with telecom operators enabling improvements in 4G services, said V. Sridhar, Professor at the Centre for IT and Public Policy at IIIT-Bangalore.
“Spectrum holding per operator in a service area in our country is well below the international average,” observed Mr. Sridhar. “So any further auctioning of spectrum is welcome,” he added.
“Today’s approval will help increase spectrum holding for provisioning of 4G to a larger part of the user base even while improving the quality of telecom services. We need to improve 4G penetration. There are about 700 million mobile broadband subscribers in the country, some of whom are on 3G. Subscriber count needs to go up for 4G given that our total mobile subscriber base is 1,149 million,” Mr. Sridhar said.
“We need 4G in every nook and corner of the country. However, the bands, especially the 700 Mhz band, must be priced appropriately and it must be picked up. In the last round, the reserve price was too high and no operator picked up spectrum in this band,” he added.
“Spectrum auction is a transparent process of spectrum assignment to successful bidders. Sufficient spectrum availability increases the quality of telecom services for the consumers. It is relevant that the telecom sector today is a key infrastructure provider with strong linkages with economic growth, direct and indirect employment generation and expansion of Digital India,” the government said in the statement.
