Proposal of Spectrum Auction approved

Proposal of Spectrum Auction approved

Part of: GS Prelims and GS-III – Infrastructure

In news

• The Union Cabinet has approved a proposal of the Department of Telecommunications to conduct spectrum auction through which spectrum will be assigned to the successful bidders for providing commercial mobile services.

Key takeaways

• The auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands.
• Spectrum will be offered for assignment for validity period of 20 years.
•  A total of 2251.25 MHz is being offered with total valuation of Rs. 3,92,332.70 crore (at reserve price).
• 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 their services.
• Successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount upfront and remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years.
• In addition to the bid amount, successful bidders will also have to pay 3% of the Adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through this auction.