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DoT issues guidelines for spectrum auction

Press Trust of India
Sep 28, 2012 at 11:37pm IST

New Delhi: Telecom companies whose licences have been cancelled by the Supreme Court will have to pay one time, non-refundable entry fee Rs 1 crore for unified licences for each service area, said the guidelines issued by the DoT for the spectrum auction beginning November 12.

"Entry fee (non-refundable) Rs 1 crore for each Service Area Level UL (Access Services) except for Jammu and Kashmir and North East Service Areas where Entry Fee shall be Rs 50 lakh each," said the Notice Inviting Application issued by DoT on Friday.

The companies who have lost their licences after the Supreme Court judgement will be treated as new companies for participating in the auction and they need to obtain Unified Licence if they win the spectrum.

DoT issues guidelines for spectrum auction

The companies who have lost their licences will be treated as new companies for participating in the auction.

DoT said that in addition to the one time non-refundable entry fee, "annual licence fee as a percentage of AGR (Adjusted Gross Revenue) will be payable as per the rates specified by DoT".

The NIA does not include concept of national level unified licences that was recommended by Telecom Regulatory Authority of India.

"If an existing players emerges successful bidder then that company will have to apply to DoT for amendment of existing License within seven calendar days of being declared successful in the auction," the NIA said.

In the auction, government has put eight blocks each of 1.25 Mhz spectrum each for auction in case of 1800 Mhz band and it will auction three block of 1.25 Mhz of airwaves frequencies for 800 Mhz spectrum band.

NIA shows that DoT will provide additional three blocks of spectrum for 1800 Mhz band across all circles, except Delhi and Mumbai.

The government is holding auction of spectrum freed from cancellation of 122 telecom licences by Supreme Court on February 2.

The Supreme Court on February 2 cancelled 122 2G licences granted during the tenure of former telecom minister A Raja declaring it as "illegal" and blamed the government's flawed first-come-first served policy.

The government has plans to auction airwaves frequencies in 1800 Mhz band and 800 Mhz band which are being currently used for GSM and CDMA mobile telephony services respectively.

A new player bidding for 1800 Mhz will have to pay minimum of Rs 14,000 crore for pan-India services and for 800 Mhz band it is Rs 9,100 crore.

According to auction rules, for 1800 Mhz band, new entrants will be required to bid for minimum of four blocks each of 1.25MHz in each service area and for 800 Mhz band it is minimum of 2 blocks each of 1.25MHz in each service area.

However, government has provided option of deferred payment for the companies that win auction.

"In case of Deferred Payment option, upfront payment of 33 per cent in the case of 1800MHz Auction and upfront payment of 25 per cent in the case of 800MHz Auction of the final bid amount shall be made within 10 days of declaration of successful bidders and final price," NIA said.

Further, DoT has given a moratorium of 2 years for payment of balance amount of one time charges for the spectrum, which shall be recovered in 10 equal annual instalments.

There shall be a lock-in period for equity of a person whose share capital is 10 per cent or more in the bidding company on the effective date of UL (Access Services) and till completion of three years from the date of allotment of spectrum or till fulfilment of all the Roll-out obligations prescribed in the NIA, DoT said.

Earlier, Unified Access Services Licences were issued to mobile telephony providers for Rs 1,658 crore and were bundled with 4.4 Mhz spectrum.

The Unified Licences, however, will not have spectrum bundled with them.

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