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The government of India focuses on an income of Rs. 64,580.92 crores in the current financial year from spectrum auction, a Parliamentary panel has said. "For the year 2016-17, the Ministry of Finance have set the target of Rs. 98,994.93 crores, which is inclusive of Rs. 64,580.92 crores as spectrum auction revenue," a report by the Standing Committee on Information Technology said on Tuesday.
The inter-ministerial board of Telecom Commission on Saturday agreed to the base price of different frequency bands as recommended by the regulator Trai for the auction to be held in July this year. At the Trai-proposed base costs, selling off all spectrum would bring Rs. 5.36 lakh crores to the exchequer.
The frequencies put on the block incorporate range in premium 700MHz band (4G and advance), 800MHz (2G,4G), 900MHz (3G, 4G), 1800MHz (2G,4G), 2100MHz (3G), 2300MHz (4G) and 2500MHz (4G). As per the payment rule proposed by the board, the board has favored that companies winning spectrum in higher recurrence groups above 1Ghz like 1800MHz, 2100MHz, 2300MHz ought to make 50 percent upfront payment and rest in 10 years after a 2-year moratorium. In earlier auctions, companies were given the option to make 33 percent upfront payment.
For the spectrum underneath 1Ghz band, for example, 700MHz, 800MHz, 900MHz, companies will require to pay 25 percent upfront and rest in 10 years following a 2-year moratorium. It is in accordance with the routine of prior barters, however, varies from Trai recommendation. Telecom Ministry will seek approval of cabinet on base price and auction terms.
As per the rule approved by the inter-ministerial panel chaired by telecom secretary J S Deepak, a company interested in buying spectrum in 700MHz band will need to shell out a minimum of Rs. 57,425 crores for a block of 5MHz on the pan-India basis. This band alone has the potential to fetch bids of over Rs. 4 lakh crores.
On the off chance that all range in 700MHz band gets sold at even Trai suggested base value, then fruitful bidder should pay over Rs. 25,000 crores after closeout. Driving administrators have asked for to concede offer of 700MHz range, saying that ecosystem for providing services in this band was not developed and sale would lead to underutilization of the spectrum for several years and block industry's fund.
The aggregate potential income of Rs. 5.36 lakh crores from the spectrum sale are more than twice of telecom administrations industry gross income of Rs. 2.54 lakh crores reported in 2014-15 financial year.
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