Indian Cabinet Approves 2G Spectrum Auctions

The Union Cabinet has now approved the auction of 380.75 MHz of 2G spectrum in 800 MHz, 900 MHz and 1,800 MHz spectrum bands and finalized the base prices at which the said spectrum bands would be put to auction. Please refer our earlier posts in this regard here. As per media reports, the upcoming auction is possibly set to be one of the largest of its kind.

The approved final base prices and the relevant telecom circles are captured in the following table:-

Spectrum Band	Base Price Approved by the Cabinet (in INR crores)	Telecom Circle
800 MHz	3,646	Pan-India
900 MHz	3,980	Pan-India, excluding Delhi, Mumbai, Kolkata, and J&K
1,800 MHz	2,191	Pan-India, excluding Maharashtra and West Bengal

 

In December 2014, the Telecom Commission had approved base prices for the said spectrum bands, on the basis of the recommendation made by the Telecom Regulatory Authority of India (“TRAI”). Please refer our previous post Telecom Commission Approves Base Price for 2G Spectrum for the approval.

The base prices finally approved  by the Cabinet are the same as those approved by the Telecom Commission, with the exception of price of spectrum in the 900 MHz band wherein the Telecom Commission had recommended a slightly lower base price of INR 3,693 crores.

As per the tentative timelines issued by the DoT, the auction process is expected to commence from February 23, 2015, after the initial pre-qualified stage of the bidders that is expected to be completed by February 13, 2015.

Minister for Communications and Information Technology, Ravi Shankar Prasad,was quoted as stating that the government intends to auction 3G spectrum in the 2,100 MHz band simultaneously with the 2G spectrum. However, it is to be noted that the Cabinet has not announced the base prices for 3G spectrum as yet. In this regard the TRAI has  just issued its recommendations for the base prices for 3G spectrum in the 2,100 spectrum band. Our previous post on the 3G spectrum pricing recommendations can be accessed here.

In the auctions for 2G Spectrum held in 2014 the Government had received over INR 62,000 crores. Please refer our earlier post on the 2G Spectrum Auction 2014 for details. It is expected that the proceeds from this years’ spectrum auctions will help the government reach its fiscal deficit target of 4.1 per cent of GDP.