2G auction: Tel cos to pay Rs 1,332 cr

2G Auction

Telecom companies whose licences were quashed by the Supreme Court will be required to pay a minimum earnest money of Rs 1,332 crore to bid for pan-India spectrum in the auction that starts on November 12.

The auction guidelines issued by the Department of Telecommunications in Notice Inviting Application say that telecom companies whose licences had been cancelled will be treated as new players in the bidding.

Any new firm looking to start mobile phone services business will have to win at least two blocks of spectrum in the 800 Mhz band that is used for CDMA services.

For each pan-India level block in 800 Mhz, DoT has asked for earnest money deposit of Rs 684 crore. However, there is no spectrum available in Rajasthan circle which reduces pan-India earnest money deposit amount by Rs 18 crore to Rs 666 crore.

In this spectrum band, a new player can bid for minimum of two blocks (earnes money deposit is Rs 1,332 crore for two blocks) and existing service providers can bid only for one block of spectrum.

In case of 1800 Mhz spectrum, telecom companies will have to provide earnest money deposit of of Rs 530 crore for each block.

The guidelines say new players will have to bid for four blocks of 1800 Mhz spectrum to start services, while existing players will be allowed to bid a maximum of two blocks.

A new firm will have to provide a Rs 2,120 crore earnest money for four blocks of pan-India spectrum and existing players will be need to provide minimum of Rs 530 crore.

The auction guidelines have made it official that foreign firms can bid for spectrum on their own and obtain telecom licences on winning spectrum.

DoT has also decided to provide additional three blocks of spectrum in all telecom service areas, except Delhi and Mumbai, in 1800 Mhz band for auction if required.

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