Spectrum sale may only generate Rs 10,000 crore initial payment

As per news report, from spectrum auction the government may generate an initial payment of Rs 10,000 crore. This highlights the fact that the next spectrum sale could generate only around Rs 35,000-40,000 crore, as against the Rs 5.86 lakh crore worth of airwaves the government intends to sell at a base price, says experts.

The bidders generally pay an upfront amount of 25% for sub-1 GHz spectrum, and 50% upfront for higher frequency bands. The rest amount is paid over 16 years in annual instalments.

Vodafone Idea and Bharti Airtel may not participate in the 5G spectrum auction planned in March or April. Airtel may purchase some 4G airwaves mainly in circles where its permits are expiring, the report said.

“Of the three players, Jio may take some 5G spectrum but not much, besides some 4G. We expect it will do so to get the first mover advantage,” an official told the publication.

The government will receive Rs 20,000-25,000 crore from licence fees and spectrum usage charge, below the Rs 1.33 lakh crore budgeted for FY21. Without the adjusted gross revenue (AGR) dues, the government will be unable to meet its target, the report said.