Government estimates Rs. 9,500 crore revenue from sale of CDMA spectrum

The Government may get over Rs. 9,497 crore from sale of CDMA band spectrum in the second round of auctions in March, and one-time fee on airwaves held by existing operators.

If all the CDMA spectrum put up for auction is sold at the revised starting price, then estimated auction proceeds will be Rs. 9,497.15 crore.

That includes Rs. 6,463.95 crore from auction directly and Rs. 3,033.20 crore from one-time spectrum fee that will be levied on existing players, official sources said.

Bidders of the CDMA spectrum are likely to be given option of deferred payment, where they will have option to pay 25 percent of the bid amount, as was recommended by Telecom Regulatory Authority of India. In this case, government calculations show that it will be able to get at least Rs. 1,615 crore from sale of spectrum in the auction.

The one-time spectrum fee will be levied on Reliance Communications, Tata Teleservices, Sistema Shyam and both state-owned telecom operators BSNL and MTNL with effect from January 1, 2013 for rest of their licence period.

Sources said that charge for additional CDMA spectrum held by RCom is estimated to be around Rs. 1,752 crore and for Tata Teleservices Rs. 1,155 crore approximately. Amount to be paid by other companies could not be ascertained.

The government on Thursday slashed by half the opening price for sale of spectrum used by mobile operators on the CDMA platform, a move that may encourage local unit of Russia's Sistema to bid in the auction.

The earlier reserve price for CDMA spectrum was 11 times higher, compared to Rs. 1,658 crore that telecom operators paid for pan-India business permit in 2008.

The earlier price amounted to Rs. 18,200 crore for 5 MHz of pan-India CDMA spectrum but no bids were received at that price. It was estimated to fetch the government Rs. 12,927.91 crore from sale of spectrum in the auction, and Rs. 5,937.64 crore from one-time spectrum fee.