Union Cabinet approves guidelines for the next round of 5G spectrum auction in India

A total of 2251.25 MHz is being offered with a total valuation of Rs. 3, 92,332.70 Crores, says Union Minister of Communications

The guidelines for the next round of 5G auctions are finally approved by the Union Cabinet, which is expected to commence in the last week of January, stated by Union Minister Prakash Javadekar.

The Indian Union Minister of IT and Communications Ravi Shankar Prasad also mentioned that after the auctions there will be a new panel on national security and the telecom operators are required to use new-fangled and innovative devices, which are designated as trusted products.

Minister Ravi Shankar Prasad said exclusively to the Mint, “Cabinet approves Auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands, for a validity period of 20 years. A total of 2251.25 MHz is being offered with total valuation of Rs. 3,92,332.70 crores.”

He added, “It’s been 4 years since the last auction, conditions for the auction to be same as 2016. This means, notice inviting applications will commence this month. We propose to hold auction by March 2021.”

The existing telecom service providers are allowed to escalate their network capacity whoever wins the auction, whereas the emerging providers will also be able to begin their services. During the auction, every bidder will be abiding by certain rules and regulations such as spectrum cap (maximum volume of the spectrum that can be gained by each bidder), the block size (in which bidders will be able to submit their bids), payment terms, roll-out duties and commitment.

Another catch is that winning bidders have the option to pay the entire amount at a time or an option to pay a certain amount like 5% for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50% for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands and the rest of the amount in a maximum of 16 installments, a halt of two years.

Apart from that, winning bidders will also have to pay an AGR of 3 per cent, which excludes wireline services. Meanwhile, the telecom regulatory body TRAI proposed a plan of spectrum auction of Rs 5.22 Lakh Crore. Nonetheless, DoT has identified some of the spectrum frequencies auction are utilized by the department of space and defense ministry.

Upon pan-India basis, TRAI has asked for a proposed based price of 5G spectrum between 3,300-3,600 Mhz band around Rs 492 Crore, which is around Rs 50,000 Crore 100 Mhz of 5G spectrum to offer the service.

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