The Union Cabinet on Wednesday approved the proposal for the auction of 2,251.25 megahertz of spectrum worth Rs 3.92 lakh crore at the base price. The Government, however, has decided not to auction frequencies in 3,300-3,600 Mhz bands that were identified for 5G services.
Addressing media, Telecom Minister Ravi Shankar Prasad said the Ministry plans to issue a notice to invite bids in December and hold the spectrum auction by March. In a bid to tighten security of communications network, the Cabinet Committee on Security decided to create the National Security Directive on Telecommunication Sector, which will mandate service providers to purchase equipment from trusted sources.
The move is widely believed to be aimed at banning the use of Chinese equipment in the telecom sector.
“The auction will be for spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands. Spectrum will be offered for assignment for a validity period of 20 years. A total of 2,251.25 MHz is being offered with a total valuation of Rs 3,92,332.70 crore (at reserve price),” an official statement said.
The Digital Communications Commission, the apex decision making body of the Department of Telecom, in May had approved the spectrum auction plan worth Rs 5.22 lakh crore which included radio waves for 5G services as well. However, a part of the 300 Mhz of spectrum identified by the DoT for 5G services is being used by the Navy, and the Department of Space has also made claims on a significant portion of these radio waves.
The telecom operators has also been demanding the Government to lower the base price of 5G spectrum as each operator will need to shell out around Rs 50,000 crore for the required quantum of radio waves for the next generation services. Prasad did not reply to questions on the status of 5G spectrum. He said that the Government has retained rules of 2016 for payments in the upcoming auction as well. Besides the bid price, the telecom operator will also need to pay a 3 per cent revenue share to the Government every year.
“In addition to the bid amount, successful bidders will also have to pay 3 per cent of the adjusted Gross Revenue (AGR) excluding wireline services as spectrum usage charges for the spectrum won through thisauction,” the statement said.
“Successful bidders may pay entire bid amount in one go (upfront) or may exercise an option to pay a certain amount (25 per cent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 per cent for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront and remaining amount in a maximum up to 16 equated annual installments, after a moratorium of two years,” the statement said.
Detailing about National Security Directive, Prasad said the directive has been framed from the perspective of national security. “Considering the need to ensure India’s national security, the Cabinet has accorded approval for the National Security Directive on Telecommunication Sector,” Prasad said. Under the provisions of this directive, the Government will declare a list of trusted sources and trusted products for installation in the country’s telecom network.
“The methodology to designate trusted products will be devised by the designated authority, the National Cyber Security Coordinator. Telecom service providers are required to connect new devices that are designated trusted products,” Prasad said.
“The list of the trusted source and product will be decided based on approval of a committee headed by the deputy national security advisor. The committee will consist of members from relevant departments, Ministries and will also have two members from the industry and independent experts. The committee will be called the national security committee on telecom,” Prasad said, adding that policy will be formed in 180 days.
