DoT planning to start spectrum auction by mid-July

New Delhi: Department of Telecom is looking to commence the auction for spectrum, including in 700 Mhz band, around mid-July, which may fetch the government a whopping Rs 5.36 lakh crore.

"Telecom Commission is meeting on March 28. The DoT is expecting Cabinet approval on spectrum price by mid-May and issue notice for auction in June.

Taking into account various processes, spectrum auction should begin around July 15," an official source said.

The Telecom Regulatory Authority of India (Trai) has suggested a plan for spectrum sale, expected to be held in July, with a potential to fetch Rs 5.36 lakh crore. It will be the biggest-ever auction in terms of value and is more than double the gross revenue of telecom services industry.

Telecom service providers had a gross revenue of Rs 2.54 lakh crore in 2014-15.

The source further said apart from spectrum auction the Telecom Commission in its Monday meeting will deliberate upon half a dozen transformative norms for the industry including virtual network operators.

Trai had recommended a record high base price of Rs 11,485 crore per Mhz for the 700 Mhz band. If all available radiowaves under this get sold at the Trai-suggested price, it alone will yield a whopping Rs 4 lakh crore.

The source said some clarifications are required on Trai's suggestions for which it needs to be send back to the regulator.

"Trai reverts in 15 days. It can even reply early. Given all the processes involved, DoT will be able to hold auction in July," the source said.

According to the Trai paper, the cost of delivering mobile services in 700 Mhz band is approximately 70 per cent lower than 2100 Mhz frequency, which is widely used for 3G services.

The committee has found that in some telecom circles, including UP East, UP West and Bihar, Trai recommended around 40 per cent lower price for 700 Mhz band than 900 Mhz band.

Spectrum is priced on the basis of its efficiency to carry mobile signals and ecosystem of device and equipment available for its usage. Lower the frequency band, the higher is its efficiency to carry long-distance signals.

The government expects a revenue of Rs 98,995 crore from communication services in 2016-17, which includes proceeds from spectrum auction and other fees levied by the DoT.Trai has suggested spectrum price for all frequency bands that can be used for mobile services in India.

Another official source said spectrum harmonisation with defence is expected to be completed before auctions start.

"Spectrum harmonisation has minimal impact on spectrum auction. DoT will get 200 Mhz spectrum on pan-India level out of this harmonisation. In some circles there is no spectrum left in the 1750-2000 Mhz band which is being harmonised," the officer said.