India’s biggest spectrum auction to begin September 29

“In our view, 1,800 MHz and 2,100 MHz spectrum bands will see most participation from telcos”, added the Goldman Sachs report, a view shared in the majority of six reports analysed by IANS. The auction will be for frequency bands of 2500 MHz, 2300 MHz, 2100MHz, 1800MHz, 900MHz, 800MHz, and 700MHz.

Bank of America Merrill Lynch also cautioned about the 700 MHz pickup, citing reasons like high pricing, relatively immature handset and equipment eco-system and theb already available 4G spectrum in other bands like 1,800 Mhz and 2,300 MHz. “The government is offering additional 234.5 MHz airwaves for auction in these two bands at a reserved price of Rs 27,000 crore”.

India government has reduced the lock-in period of equity in the company to one year instead of earlier stipulation of minimum period of 3 years or completion of roll out obligation, whichever is later.

“We do not expect the 700 MHz auction to be a success”, it added.

The government expects to raise at leasts Rs 64,000 crore from the spectrum auction this fiscal. It has beaten gold so it is expensive. “We will wait for the auctions to see what the response is”, Deepak said. “Also, the spectrum will be assigned to the successful bidder within 30 calendar days from the day of receipt of due payment under both options”. It has also reduced interest on installments to 9.3 percent from about 10 percent earlier. The rollout obligation, he said, would be considered complete if district headquarters and block headquarters are covered by use of any technology in any band.

Successful bidders will be allowed to self certify network rollout to the tune of 90 per cent while 10 per cent will be left for verification by department of telecom’s (DoT) monitoring arm.

Spectrum holding cap: There is a band-wise cap of 50 % of the total spectrum assigned in a spectrum band for a particular service area, and an over-all cap of 25% of the total spectrum assigned in a service across all bands is applicable to selected bidders. “Operators will need to guard against getting swayed by competitive spirits and bid with long-term interests in mind in the September 2016 auction”, said Kotak in a note. Remaining payment will have to be paid in 10 annual instalments after a twoyear moratorium.

In 2015 auctions, among the firms that aggressively bought airwaves were Bharti Airtel Ltd, Idea Cellular, Reliance Jio. He said, the government believes that the auction will provide a great opportunity to the existing service providers as well as new entrants.

The government has modified method of calculating spectrum cap in a circle in a way that will allow companies to hold more spectrum compared to earlier levels. Indeed, the big change is that India is moving to an era of spectrum glut from one of spectrum scarcity even a year ago, a direct result of which will be more reasonable bidding in September, especially since, this time around, telcos know there is plenty more spectrum available. “The spectrum cap shall not be reduced in case spectrum is allocated for non-commercial use after auctions”, as per the NIA.

Auctions will be conducted through simultaneous multiple-round ascending format, wherein bids can be made on any lot or combination of lots in each round, and a pre-bid conference to give all bidders a forum to address their queries and provide clarifications will be held on 13 August.