Despite the lukewarm response on telecom spectrum auction which was concluded on Thursday with a commitment of Rs 65,789 crore by selling 964.80 MHz of spectrum, nearly Rs 37,000 crore will come to the Government’s kitty this fiscal. The winners of spectrum auction have to deposit Rs 32,000 crore within 10 days of receipt of allotment letters and the rest around Rs 5,000 crore of service tax will be paid by telecom firms.
“The proceeds from spectrum sale for this financial year would be bolstered by additional Rs 5,000 crore on account of 15 per cent service tax that is applicable on the sale consideration. Therefore, the realisation for the current fiscal would be close to Rs 37,000 crore,” said Telecom Secretary JS Deepak.
The Government received commitment of Rs 65,789 crore by selling 964.80 MHz of spectrum, more than the combined amount of airwaves sold in past four auctions, in a sale that concluded on Thursday. Of this, winners have to deposit Rs 32,000 crore within 10 days of receipt of allotment letters.
While the allotment letters may go out as early as Monday, the spectrum would be assigned to the winning companies within one month of their depositing the money, Deepak said.
Asked if he was satisfied with the spectrum auctions, Deepak said, “yes. Our expectations are met. The Government has not sought to profiteer. The amount of spectrum sold is more than the cumulative spectrum sold in the last four years. The upfront payment from spectrum sale this fiscal is also going to be the highest in the last 5 years,” he said.
The Telecom Secretary conceded that lack of interest in 700 Mhz band was on account of higher prices and lack of ecosystem for the band. But he declined to comment on when the Government plans to put the unsold spectrum on the block or whether the same would be done at reduced reserve prices.
The auctions have ended the spectrum scarcity that was faced by the telecom industry in India, he said, adding that against total of 930 Mhz of spectrum sold over the last four years, the Government sold 965 Mhz of spectrum in the 2016 auctions. “This will improve the quality of services,” he added.
The five-day spectrum auction logged in bids worth Rs 65,789 crore. Bids were received for 964.80 MHz of spectrum out of 2,354.55 MHz across seven bands put on offer. UK-based Vodafone’s India unit was the most aggressive, taking home Rs 20,279 crore worth of spectrum. Bharti Airtel, the nation’s biggest telecom company, bought Rs 14,244 crore worth of spectrum, while Idea Cellular put in Rs 12,798 crore of bids. Newcomer Reliance Jio spent Rs 13,672 crore on spectrum buying.