Govt to get Rs 16,750 cr from spectrum sale this fiscal

The government will get a minimum of Rs  16,750 crore in the current financial year from spectrum auction. Bids to the tune of Rs  56,554.92 crore have been received after 42 rounds of bidding .

Telecom secretary M. F. Farooqui said, " there will a realisation of at least Rs  16,750 crore in the current fiscal if the operators opt to pay in instalments." The government has already surpassed its estimate to garner Rs  11,300 crore from the sale in current financial year.

The bidders have to pay a part of the money upfront while the remaining amount can be paid over a maximum of 10 yearly installments.

The government had decided to introduce this arrangement in order to reduce the financial burden on the telcos so that economic viability is not impacted and at the same time get a better price for the spectrum.

Bids worth around Rs  33,082.58 crore have been received for 1800 Mhz and Rs  23,472.34 crore for 900 Mhz.

The auction is witnessing aggressive bidding in the premium 900 Mhz band from companies such as Vodafone, Reliance Jio and Bharti Airtel, with the price of Delhi circle already doubled to Rs  733.63 crore per MHz from the base price of Rs  360 crore.

Mumbai has also seen over 70 per cent jump in the price to Rs  563.09 crore per MHz.

It is a must for both Vodafone to get spectrum in 900 MHz band in Delhi, Mumbai and Kolkata and Airtel in Delhi and Kolkata if they want to continue operations in the band as their licences are coming up for renewal in November.

If the companies fail to get spectrum in 900 Mhz band, they have to shift their infrastructure to 1800 Mhz band to continue operations, which entails a huge cost.

Sources said as cash- rich Reliance Jio is also bidding for the 900 Mhz band the price has shot up. At present, Vodafone owns 8 Mhz in 900 Mhz band in Delhi and Mumbai while Airtel holds 8 Mhz in Delhi.

Courtesy: Mail Today