Govt expects Rs 20k cr from next round of spectrum auction

The government is expecting Rs 20,000 crore from the second round of spectrum auction later this fiscal, Telecom Secretary R Chandrashekhar said. "At this base price, we would expect approximately, I would say, somewhere around Rs 20,000 crore for all the spectrum in 1800 Mhz and 900 MHz that is put on the auction block," Chandrashekhar told reporters on the sidelines of the India Telecom 2012 event organised here by Ficci.

He added that the same auctioneer will be used for the auctions, which is expected to be completed before fiscal-end. The Cabinet yesterday approved a 30 per cent cut in the reserve price for sale of mobile phone spectrum in the four zones of Delhi, Mumbai, Karnataka and Rajasthan, that went unsold in the recent damp-squib auction. The reserve price for last month's sale per block in Delhi was Rs 693.06 crore, while the same for Mumbai, Karnataka and Rajasthan was fixed at Rs 678.45 crore, Rs 330.12 crore and Rs 67.08 crore respectively.

The Cabinet also gave its go ahead for auctioning spectrum in 900 MHz band in Delhi, Mumbai and Kolkata simultaneously with the sale of radiowaves in 1800 Mhz in these four circles. The base price for 900 MHz band will be twice the reserve price for the 1800 MHz band, where the auction determined price is not available. These circles found no takers on account of high reserve price. "In Delhi and Mumbai, the reserve price of 900 MHz will be twice the reserve price of 1800 MHz, (but in) Kolkata, it would be twice the auction (discovered) price of 1800 MHz," Chandrashekhar said.

On the number of blocks to be made available in the 900 MHz band, the Telecom Secretary said it will be the same spectrum held by operators whose licences are coming up for renewal in November 2014. "...That would be approximately be 15 MHz in Delhi and Mumbai and less than that in Kolkata. Three blocks in Delhi and Mumbai of 5 Mhz each, as you know auction is being conducted with block size of 1.25 MHz, and Kolkata would be 12.5 Mhz which would be put up for auction," he said.

Asked if existing operators will be allowed to bid for more than 5 MHz in 900 Mhz band, he said all these issues will be firmed up and will be taken to the Empowered Group of Ministers (EGoM) for a final decision. "All these issues will be firmed up and it will be taken to EGoM for a final decision in terms of parameters for existing operators and for bidders, what's the minimum and what's the maximum and what is the actual number of blocks that would be put for auction," Chandrashekhar added.

In last month's auction, 176 blocks were put to auction, of which 102 blocks were bid for and won. Bihar was the only circle, where the winning price was 9.22 per cent higher than the reserve price, while 17 circles went for the reserve price. The remaining four circles saw no takers. None of the companies in the fray bid for pan-India spectrum for which the reserve price was set at Rs 14,000 crore. The government had put on auction more than half of the spectrum that was freed from the cancellation of 122 licences by the Supreme Court in February this year in the 2G case. The licences were issued by the then telecom minister A Raja to nine companies in 2008.