India's biggest telecom spectrum auction deferred by two days

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SME Times News Bureau | 30 Aug, 2016
India's biggest-ever telecom spectrum auction has been deferred by two days,to October 1 from September 29, the Department of Telecommunications (DoT) said in a revised Notice Inviting Application (NIA) for the auction in New Delhi on Monday.

While the NIA gave no reasons for the change, it is learnt that two reasons prompted the change in the date. First the telecom operators have requested the government that the auction should start from an auspicious date (and not from the inauspicious Shradhh period) and secondly they also said there should be a gap of at least three working days between mock auction and actual auction.

The revised timetable of the auction has put the mock auction dates on September 26 and 27 and the start of actual auction from October 1.

The total amount of spectrum that will be offered for sale is 2,354.55 MHz. Overall, based on the reserve price, the mop up is expected to be Rs 5.66 lakh crore.

The 2,300-plus MHz of airwaves on the block for telecom operators is in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- as against 470.75 MHz in the previous round, which is set to fetch the exchequer $17 billion during its tenure.

mjunction services limited is advising the government on this auction.

The government has decided to allot the right to the spectrum won through auction for 20 years.

The operators will have the choice of both upfront and installments payment options. The service providers who win airwaves below 1 GHz bandwidth will have to pay 25 per cent upfront, and those winning above that the upfront payment will be 50 per cent.

One new bidding-friendly measure the government has adopted this year is that spectrum won will be assigned within 30 days from the date of upfront payment. Interest on deferred payment, linked to base rate, will be 9.3 per cent this year against 10 per cent in 2015.

For the successful bidder, the lock-in period of equity in the company has been reduced to one year instead of earlier stipulation of minimum period of three years or completion of roll out obligation, whichever is later.

In a meeting of the cabinet in June, chaired by Prime Minister Narendra Modi, an official nod was given for the reserve price and the auction norms.