New spectrum auction next year: Budget

The budget for 2011-12 has confirmed suspicions that the government will soon have another round of spectrum auctions.

The government had, earlier in the month, given out a detailed list of states where there is excess telecom and broadband spectrum in an indication that it was gearing up for another auction.

It had conducted a round of auction for 3G and 4G airwaves in 2010 May which fetched more than Rs 1,00,000 crore or about $21 billion.

According to the budget, it intends to raise around Rs 30,000 crore ($6.5 billion) in the coming year, both through auctions as well as through spectrum fees.

Spectrum fees are paid by the existing operators to compensate for the spectra they got when they were awarded licenses, often for free. It is usually calculated as a percentage of their annual gross revenues.

Finance Secretary Sushama Nath said the auctions would happen in the year 2011-12, but refused to say exactly when. “There is a group of ministers that has to decide when to auction, what to auction. But we expect that order of receipts to come in,” she told reporters immediately after the Budget was presented by finance minister Pranab Mukherjee on Monday at 11 am.

Thanks to vacation by the defence forces, many states in India have excess spectrum that are yet to alloted to any telecom operator. According to government data, there is around 20 MegaHertz of 2.3 GHz spectrum available in 16 of the 21 states in the country, valued at around Rs 14,000 crore.

In addition, many states have voice spectrum ranging from 2 to 3 MHz to 30 MHz in some. More 2G spectrum may be free up if government cancels licenses of the some operators under the ongoing investigations into a 2G scam.