Next round of spectrum auction in February; may fetch Rs14,000 cr

The Department of Telecommunications (DoT) expects to start the next round of spectrum auction in around six months, and reportedly hopes to rake in around Rs14,000 crore by selling spectrum in 800MHz, 900MHz, 1,800MHz and 2,100MHz bands.

''In the budget estimates for financial year 2014-15, a projection of total of Rs.9,355 crore has been made in respect of revenue receipts from auctions in the bands of 800MHz, 900MHz and 1,800MHz. Further, it has been indicated to the ministry of finance that receipts may be increased by Rs5,000 crore on account of 3G spectrum auction, which may be possible subject to release of spectrum held by defence,'' according to an internal memo issued by the DoT.

According to the note, DoT will start the process of auctioning the spectrum by first issuing a request for proposal (RFP) for an auctioneer on 14 August. This is expected to be finalised by 17 October after which a notice inviting applications (NIA) will be issued on 1 December.

While the auction of airwaves in the 900 MHz spectrum was due owing to a number of telecom permits coming up for renewal, the news that airwaves will be sold in the 2100 MHz or 3G band will cheer the industry, which has been clamouring for more mobile data spectrum to fuel its growth.

The NIA is a legally binding document, which contains the rules and regulations that will govern the auction. After the publication of NIA, DoT will hold a pre-bid conference and issue clarifications for potential bidders, following which the auction will begin.

The government has set a revenue target of Rs45,471 crore from communication services, including spectrum auctions as well as other charges that telcos pay to operate in the country. The receipts under the same head were Rs40,847.06 crore in 2013-14, according to revised budget estimates.

Much of the spectrum to go on sale this time around will be from the 900MHz band that is currently held by incumbent operators in the non-metro circles. Telcos are nearing the expiry date of these frequencies and hence the airwaves are going up for auction. The government is also looking to auction 800MHz spectrum that has so far been used by the CDMA- based telcos.