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The government last week, slashed the rates of the 800MHz CDMA band to Rs.9,100 crore as there were no takers for the auction. This rate reduction by the Government may see the entry of more bidders for auction.
More takers for the spectrum mean more revenue for the Government. The Government has now estimated that it could earn about Rs.9, 500 on CDMA spectrum auction.
The Indian Government reportedly will earn around Rs. 6,463.95 crore from the auction and Rs. 3,033.20 crore from one time spectrum fee. The one-time spectrum fee is a fee imposed on the existing operators. The Government is also planning to give the bidders an option of deferred payment.
The bidders will then have the option of paying 25 per cent of the bid amount, as advised by the Telecom Regulatory Authority of India. If this is the case, the Government will fetch a revenue of Rs. 1, 615 crore.
The companies which are covered under the one time license fee are Reliance Communications, Sistema Shyam, Tata Teleservices, BSNL and MTNL. Rs.1, 752 crore will be paid by Reliance Communications as additional spectrum charges and Tata Teleservices will pay an amount of Rs. 1,155 crore. The amount that is to be paid by other companies is not known yet.
The Government had initially fixed the base price of the spectrum 11 times higher, whereas in 2008 a total of Rs.1, 658 crore was paid by telecom operators. The Government has also approved a rate cut of 30 per cent in the 1800 MHz band. The auction guidelines are expected to be finalized by the Government by February 11.