Lok Sabha Question No. 193 (UNSTARRED), answered on 2016-11-16
Subject: Spectrum Auction
Ministry: COMMUNICATIONS
Asked by: C. N. JAYADEVAN, SUSHIL KUMAR SINGH, RANGASWAMY DHRUVANARAYANA, RAMACHANDRAN MULLAPPALLY, KAVITHA KALVAKUNTLA, K. ASHOK KUMAR, BHEEMRAO BASWANTHRAO PATIL

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO.193 TO BE ANSWERED ON 16 TH  NOVEMBER, 2016

## SPECTRUM AUCTION

193. SHRI C. N. JAYADEVAN:

SHRI SUSHIL KUMAR SINGH:

SHRI R. DHRUVA NARAYANA:

SHRI MULLAPPALLY RAMACHANDRAN:

SHRIMATI KAVITHA KALVAKUNTLA:

SHRI K. ASHOK KUMAR:

SHRI C.N. JAYADEVAN:

SHRI BHEEMRAO B. PATIL:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) the  details  of  revenue  earned  by  the  Government  through  auctions  of  spectrum conducted during the last six years, auction-wise including targets fixed and results achieved;
- (b) the  details  of  the  recently  conducted  auction,  along  with  number  of  participants, quantum of airwaves put on sale and upfront payments received by the Government;
- (c) whether the auction ended well below the target and there were no takers for premium 700 MHz. and 900 MHz band of spectrum;
- (d) if so, the details thereof and the reasons therefor; and
- (e) the steps taken by the Government for better outcome in the next auction along with the time frame for the next auction and the spectrum likely to be put on auction with estimated revenue target?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) The details of revenue earned by the Government through auctions of spectrum during last six years are as follows;

| S.N.   | Aucti on Year   | Revenue Realization (Rs. in Cr.)   | Revenue Realization (Rs. in Cr.)   | Revenue Realization (Rs. in Cr.)   | Balance to be realized on 10 installments after giving 2 year moratorium@ prevailing bank interest rate   | Balance to be realized on 10 installments after giving 2 year moratorium@ prevailing bank interest rate   | Balance to be realized on 10 installments after giving 2 year moratorium@ prevailing bank interest rate   | Balance to be realized on 10 installments after giving 2 year moratorium@ prevailing bank interest rate   |
|--------|-----------------|------------------------------------|------------------------------------|------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
|        |                 | Total                              | Minimum Upfront due                | Actual Received                    | Annual Installment                                                                                        | Interest rate                                                                                             | Start Year of Installment                                                                                 | End Year of Installment                                                                                   |
| 1      | 2010            | 106262                             | -                                  | 106262                             | Nil                                                                                                       | -                                                                                                         | -                                                                                                         | -                                                                                                         |
| 2      | 2012            | 9408.00                            | 3104.52                            | 5557.00                            | 744.00                                                                                                    | 9.75%                                                                                                     | 2015-16                                                                                                   | 2024-25                                                                                                   |
| 3      | 2013            | 3639.00                            | 909.87                             | Nil *                              | 390.00                                                                                                    | 9.75%                                                                                                     | 2015-16                                                                                                   | 2024-25                                                                                                   |
| 4      | 2014            | 61162.00                           | -                                  | 18267.00                           | 8352.00                                                                                                   | 10%                                                                                                       | 2016-17                                                                                                   | 2025-26                                                                                                   |
| 5      | 2015            | 109875.00                          |                                    | 32377.85                           | 15133.00                                                                                                  | 10%                                                                                                       | 2018-19                                                                                                   | 2027-28                                                                                                   |
| 6      | 2016            | 65789.12                           | 31988.69                           | 32434.10                           | 6291.41                                                                                                   | 9.3%                                                                                                      | 2019-20                                                                                                   | 2028-29                                                                                                   |

As regards auction-wise target fixed and result achieved, it is submitted that as such no specific targets were fixed from spectrum auction. Only Reserve Price (RP) of each band of spectrum in each Licensed Service Area (LSA) put to auction, had been fixed by the Govt. on the recommendation of TRAI.

However budgetary target projection by DoT can be taken as the revenue target from spectrum auction.

The  year-wise  figures  of  revenue  projection  by  DoT  for  budget  purpose  and  actual revenue realization against that target are as follows:

|   Sl. No. | Year    | DoT Target Projection (Rs. in cr.)   | Achievement (Actual Receipts) (Rs. in cr.)   |
|-----------|---------|--------------------------------------|----------------------------------------------|
|         1 | 2011-12 | 13000                                | Nil                                          |
|         2 | 2012-13 | 40000                                | 1722.24                                      |
|         3 | 2013-14 | 11343                                | 18267.18                                     |
|         4 | 2014-15 | Nil                                  | 10791.08                                     |
|         5 | 2015-16 | 16000                                | 21587.00                                     |
|         6 | 2016-17 | 34,586                               | 32434.10                                     |

(b) the  details  of  the  recently  conducted  auction,  quantum  of  airwaves  put  on  sale  and upfront payments received by the Government are as under:

| Sl. No.   | Band (MHz)   |   Spectrum put to auction on sale (MHz) |   Spectrum sold (MHz) | Upfront payments received (Rs. in cr.)   |
|-----------|--------------|-----------------------------------------|-----------------------|------------------------------------------|
| 1.        | 700          |                                  770    |                   0   | 0.00                                     |
| 2.        | 800          |                                   73.75 |                  15   | 905.87                                   |
| 3.        | 900          |                                    9.4  |                   0   | 0.00                                     |
| 4.        | 1800         |                                  221.6  |                 174.8 | 9,337.37                                 |
| 5.        | 2100         |                                  360    |                  85   | 8,420.00                                 |
| 6.        | 2300         |                                  320    |                 320   | 7,900.06                                 |
| 7.        | 2500         |                                  600    |                 370   | 5,870.80                                 |
| Total*    | Total*       |                                 2354.75 |                 964.8 | 32,434.10                                |

Total number of Participants were 7 i.e. 1. M/s Reliance JIO, 2. M/s Bharti Airtel, 3. M/s Idea Cellular, 4. M/s Vodafone, 5. M/s Tata Teleservices, 6. M/s Reliance Infocomm. & 7. M/s Aircel.

(c) & (d) No bid was received in any of the 22 LSAs and 4 LSAs in 700 MHz and 900 MHz bands respectively. Absence of ecosystem in 700 MHz band including the non-availability of devices together with industry perception of high reserve price appear to be the main reason for  no  bids  in  the  700  MHz band. Availability of small blocks of spectrum in 900 MHz band resulted  in  no  bids  in  this  band.  In  addition,  companies  appeared  to  be  preserving  cash  to protect market share in the days to come.

- (e) No such steps finalized yet.

## (Item no. (b) of Lok Sabha Question Diary No. 3 for 16-11-2016)

| . .   | Band   | Total Spectrum Put to Auction   | Total Spectrum Put to Auction   | Total Spectrum Put to Auction   | Auction Result: Spectrum Sold   | Auction Result: Spectrum Sold   | Auction Result: Spectrum Sold   | Auction Result: Spectrum Sold   | Upfront payment (Rs. in Cr.)   | Upfront payment (Rs. in Cr.)   | Upfront payment (Rs. in Cr.)   |
|-------|--------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|---------------------------------|--------------------------------|--------------------------------|--------------------------------|
| . .   | (MHz)  | No. of LSA                      | Quantum (MHz)                   | Value at RP (Cr.)               | No. of LSA                      | Quantum (MHz)                   | Value at RP (Cr.)               | Value at SP (Cr.)               | Minimum Due                    | Actual Received                | Excess Recd.                   |
|       | 700    | 22                              | 770.00 4,01,975.00              |                                 | 0                               | 0.00                            | 0.00                            | 0.00                            | 0.00                           | 0.00                           | 0.00                           |
|       | 800    | 19                              | 73.75                           | 26,126.25                       | 4                               | 15.00                           | 3165.00                         | 3,623.49                        | 905.87                         | 905.87                         | 0.00                           |
|       | 900    | 4                               | 9.40                            | 5413.80                         | 0                               | 0.00                            | 0.00                            | 0.00                            | 0.00                           | 0.00                           | 0.00                           |
|       | 1800   | 21                              | 221.60                          | 24,647.20                       | 19                              | 174.80                          | 17341.60                        | 18,493.91                       | 9,246.96                       | 9,337.37                       | 90.41                          |
|       | 2100   | 22                              | 360.00                          | 63,345.00                       | 12                              | 85.00                           | 16140.00                        | 16,140.00                       | 8,070.00                       | 8,420.00                       | 350.00                         |
|       | 2300   | 16                              | 320.00                          | 15,200.00                       | 16                              | 320.00                          | 15200.00                        | 15,790.12                       | 9,895.06                       | 7,900.06                       | 5.00                           |
|       | 2500   | 22                              | 600.00                          | 30,680.00                       | 20                              | 370.00                          | 11740.00                        | 11,741.60                       | 5,870.80                       | 5,870.80                       | 0.00                           |
|       | Total  | 126                             | 2354.75 5,67,387.25             | 71                              |                                 | 964.80                          | 63,586.60                       | 65,789.12                       | 31,988.69                      | 32,434.10                      | 445.41                         |

## ANNEXURE

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