4G spectrum auctions: On Wednesday, the Department of Telecommunications (DoT) issued notice to invite companies applications for participation in 4G spectrum auctions in bands of 700, 800, 900, 1800, 2100, 2300 and 2500 MHz. The auctions are scheduled to commence from March 1. The companies willing to participate in the bid can submit the applications until February 5. 

After the auctions, all bidders deemed successful will have to pay the required amount within a period of 10 days. The auctioneer and advisor to DoT is Kolkata based e-commerce company MSTC Limited, which is also state owned. 

The spectrum to successful bidder would be allocated for a period of 20 years. It is viewed to boost revenue collections by government during time when tax collection from other resources like goods and service tax has dropped down amid pandemic.

On December 16, Central Government had cleared sale of 2251.25MHz spectrum sale across the mentioned seven frequency bands. The reserve price cleared is of INR 3.92 lakh crore. 

Probability is that telecom service providers (TSPs) and some other bidders might pay the full amount upfront or some amount now and remaining in 16 annual instalments after 2 year moratorium period. As per the payment plan, bidders for sub-1 GHz bands of 700, 800 and 900 MHz are allowed to opt 25% payment of bid amount now and rest later. In bands of over 1 GHz of 1800, 2100, 2300 and 2500 MHz, bidders will need to pay 50% of amount upfront and rest under equated instalments. But the successful bidders will have to pay AGR of 3% as ‘spectrum usage charges’ but excluding wireline services. 

Experts are projecting that Reliance Jio Infocomm will bid for the 800 MHz spectrum band. This is expected as the company’s licenses in 14 Licensed Spectrum Access circles will expire by July, 2021. However, Bharti Airtel and Vi have expressed their inability to shell such big amounts for new spectrum.