The Union cabinet has finalised the reserve price of spectrum in the 800 MHz, 900 MHz and 1800 MHz bands for auctions, scheduled for February 2015.

The government is targeting to realise at least Rs 648.40 billion through the auctions, which does not include the expected realisations from sale of spectrum in the 2100 MHz band.

The cabinet will finalise the reserve price for spectrum in the 2100 MHz band after the Telecom Commission gives its suggestions on the price recommended by the Telecom Regulatory Authority of India (TRAI).

While the cabinet approved the reserve price for spectrum in the 800 MHz and 1800 MHz bands as recommended by the Telecom commission, the final base price for 900 MHz is higher than that suggested by the commission. The reserve price of pan-Indian spectrum in the 800 MHz and 1800 MHz bands (excluding Maharashtra and West Bengal circles) has been finalised at Rs 36.46 billion per MHz and Rs 21.91 billion per MHz respectively. Meanwhile, the cabinet has fixed a base price of Rs 39.80 billion per MHz of pan-Indian spectrum in the 900 MHz frequency band (excluding Delhi, Mumbai, Kolkata and Jammu & Kashmir circles).

As for the quantum of spectrum to be auctioned, the government will sell 103.75 MHz of spectrum in the 800 MHz band in all circles; 177.8 MHz in the 900 MHz band in 17 circles and 99.2 MHz in the 1800 MHz band in 15 circles.

Any licensee that holds a UAS/ CMTS/ UL(AS)/UL licence with authorisation for access services for a service area, is eligible to bid for spectrum in that circle.

The last date for submission of application is February 2, 2015 and the bidders will be pre-qualified by February 13, 2015. Further, the spectrum auction will commence on February 23, 2015.

Payment terms, eligibility criteria and auction objectives shall be as in the previous auction of February 2014. Successful bidders will be given two options to make the payment for the spectrum acquired. They can make a full upfront payment within 10 days of the declaration of final price or opt for the deferred payment route.

The deferred payment will be subject to conditions — an upfront payment of 33 per cent in the case of 1800 MHz band and 25 per cent in the case of 900 MHz and 800 MHz bands, of the final bid amount within 10 days of declaration of successful bidders and final price. Also, there will be a two-year moratorium for payment of balance amount of one-time charges for the spectrum, which shall be recovered in 10 equal annual installments.