The Digital Communications Committee (DCC) today took some important decisions with regards to the telecom spectrum. There were decisions made on the spectrum prices and auction.
Talking about the total quantum of spectrum that will be put out for auctions, Telecom Secy Anshu Prakash said, “We are going to auction 8,305 megahertz, this is spectrum which is already available or which will become available in the next 18 months or so. The reserve price calculated comes to about Rs 5, 22,000 crore.”
When asked whether the telecom sector has the financial wherewithal to participate in the auction, the secretary said, “The actual auction price may actually be more than Rs 5,22,000 crore because this is just a reserve price. Now it is not that the entire amount has to be paid upfront. For sub-gigahertz bands, that means less than 1,000 megahertz bands only 25 percent amount has to be paid upfront. For higher frequency bands, 50 percent amount has to be paid upfront. The balance which is after two years of moratorium, is to be paid in 16 installments. So, it doesn’t appear to be that high.”
He further added, “We should also take into account that our telecom networks are expanding rapidly, the mobile usage and coverage is expanding rapidly. The use of data is galloping. Telcos do need bandwidth, plus many of them will also be faced with the situation that their existing spectrum availability expires, so they would need new spectrum. We think there should be robust competition and we should get good bids.”
With regards to participation Prakash said, “We will have to see at the time of auction, what the participation is but we are quite sanguine, quite hopeful that there will be good participation.”