India will kick off its largest ever spectrum auction on 29 September, with more than 2,350MHz of spectrum in seven 3G and 4G bands going on sale.

The Department of Telecom yesterday released the auction documents that outline how the sale will proceed, the Economics Times said.

The cabinet in June approved the huge auction plan proposed by the telecoms regulator. Reports said the auction is expected to raise a record INR5.6 trillion ($83 billion), far exceeding the country’s last auction, which raised INR1.1 trillion in March 2015.

The sale will see airwaves up for grabs in the premium 700MHz band, as well as the 800 and 900MHz bands, and 1.8, 2.1, 2.3 and 2.5GHz frequencies. The 700MHz spectrum will cost the most, with the reserve price set at about INR11.5 billion per megahertz, meaning a company will have to spend a minimum INR57.5 billion for a block of 5MHz.

Spectrum in the 700MHz band will go ahead despite many operators complaining that the auction should be put off for two years until the 4G ecosystem in the country has developed more.

Less bullish forecast
Research firm Crisil has a more conservative forecast, with winners expected to pay out around INR1 trillion ($14.8 billion). It forecasts bidding for the 700MHz band “to be extremely selective with players preferring the less pricey 1.8GHz”. It also said bidding interest in the 2.4 and 2.5GHz bands is expected to be limited.

The country’s Telecom Commission last month set the spectrum usage charge for the next auction at a minimum of 3 per cent of revenue.

Winners in the 700, 800 and 900MHz bands need to pay 25 per cent of the final bids within 10 days, while winners of the 1.8, 2.3 and the 2.5GHz bands need to put down 50 per cent, according to the Times. The remainder needs to be paid in 10 equal installments after two years.