The Department of Telecommunications (DoT) on Monday through its request for proposal (RFP) invited bidders to submit applications for selection of an agency to conduct the e-auction of 5G spectrum. The tenure of the contract would be 3+1 years for the Auctioneer (with normal tenure of 3 years and a provision of extension for 1 year by mutual consent, if required), the DoT notice said.
However, the guidelines for auction of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and 3300-3600 MHz bands will be announced separately, the statement said. The auction will be conducted in 22 telecom service areas as per the decision of the government, it added. Telecom Minister Ravi Shankar Prasad had said the auction would take place during this calendar year.
The auction is expected to be India's largest so far, with 8,293.95 MHz of airwaves expected to go under the hammer at an estimated total base price of Rs 5.77 lakh crore. This is 3.5 times the 2,354 MHz of spectrum offered at the previous auction in 2016, for which the total base price was Rs 5.63 lakh crore.
The industry has, however, expressed apprehension about the higher reserve price for the 5G spectrum auction. Last year, the regulator Telecom Regulatory Authority of India (TRAI) had proposed the sale of 20 MHz blocks of 5G spectrum in the 3,300-3,600 MHz band at a price of Rs 492 crore per unit. By this price, an operator would be required to pay at least Rs 9,840 crore to buy 5G spectrum on a pan-India basis as the regulator has suggested it should be put to auction in a block size of 20 MHz.
For the 700 MHz band, TRAI had suggested a 43 per cent cut to Rs 6,568 crore per unit as the spectrum went unsold in the 2016 sale due to high reserve prices. Meanwhile, rating agency ICRA has said that telecom operators are unlikely to bid aggressively for 5G spectrum as the pricing is too high. Global rating agency Fitch has also raised similar concerns.
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