Telecom Department invites application for 2G spectrum auction starting from January 23

Cutting down proposed 60 day process to 42 days for sale of telecom airwaves, the Department of Telecom has issued the main document - Notice Inviting Application - to start spectrum auction from January 23.

"The award of Spectrum in 1800MHz and 900MHz band shall be conducted as a single process. A common Notice has been issued only for the sake of convenience," The NIA issued late Thursday night said. The last date for submission of applications by interested companies is January 4.

DoT will hold a pre-bid conference on December 20 and last date for companies to seek clarifications on rules stated in 'Notice Inviting Application' is December 28, NIA said. As per the initial proposal, DoT had sought 60 days time to start auction from the date cabinet decides on the spectrum base price and the NIA was to be issued after 15 days of the decision.

The DoT has, however, issued NIA within 3 days of Cabinet putting its stamp on minimum price for two sets of 2G spectrum - 1800 Mhz band and 900 Mhz. Together, the 900 MHz and 1800 MHz band airwaves are valued at about Rs 48,685 crore.

The government has provisioned garnering Rs 40,874.5 crore from spectrum revenue in the Budget. This includes upfront money from the auction and various fees levied on airwaves used for commercial mobile communications.

The successful bidder will have option to pay final price of spectrum in installments. Successful bidder in 1800 Mhz band will have option to pay 33 per cent upfront, while for airwaves in 900 Mhz band upfront payment is 25 per cent. There shall be a moratorium of 2 years for payment of balance amount of one time charges for the spectrum, which shall be recovered in 10 equal annual installments.

Successful bidder will have to pay first installment of the balance amount on the third anniversary of the first payment and subsequent installment will have to be on the same date of each following year.

In case all spectrum gets sold and companies opt for deferred payment mode then government will be able to get about Rs 15,200 crore this fiscal from direct sale of airwaves.