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Telcos submit Rs 14,653 crore in ‘earnest money deposits’ & other fees for auctions


Idea Cellular, Vodafone, Bharti Airtel, Aircel, Tata Teleservices, Reliance Communications, and Reliance Jio Infocomm have successfully ‘pre-qualified’ for the upcoming spectrum auctions, according to information filed on the Department of Telecommunication (DoT) website. The DoT had earlier issued a preliminary notice inviting applicants for prospective bidders and specified a tentative timeline for the auction process in August.

According to the latest notification (pdf), the government has already received Rs 14,653.07 crore by way of Earnest Money Deposits (EMD)—a mandatory Bank Guarantee from a Scheduled Bank for the purpose of pre-qualification—and from application fees from 7 different telcos :

Idea Cellular has submitted an—worth Rs 2000 crore; and an additional 1 lakh rupee as application fee.
Vodafone India has submitted an EMD amount of Rs 2740 crore; and 1 lakh rupee as application fee.
Bharti Airtel has deposited Rs 1980 crore as EMD along with Rs 1 lakh as application fee.
Aircel Ltd has deposited Rs 120 crore as EMD, and 1 lakh rupee as application fee. It can bid in any spectrum band across any service area.
Tata Teleservices has submitted Rs 1,000 crore as EMD and the additional 1 lakh rupee as application fee in behalf of Tata Teleservices Maharashtra Ltd (TTML).
Reliance Communications (RCOM) has deposited EMD worth Rs 313 crore along with the application fee of Rs 1 lakh.
Reliance Jio has submitted the highest EMD amount among all telcos, which amounts to Rs 6,500 crore, along with the application fee of Rs 1 lakh.

Quantum of spectrum available for auctions and updated timeline: A total of 2,354.55 megahertz of spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300MHz, and 2500MHz bands will be auctioned by the government, which could apparently fetch it Rs 5.6 lakh crore. The auctions are expected to be held during the first week of October, according to an updated tentative timeline notified by DoT. This will be India’s largest telecom spectrum auction.


Reserve prices: The reserve prices for the 2016 auctions is set as per recommendation of TRAI; it had suggested reserve prices of Rs 11,485 crore per MHz for pan India airwaves, including the 700 MHz spectrum, which is being auctioned for the first time. Note that spectrum auctions in 2015 fetched the government Rs 1.09 lakh crore from the sale of 418.05 MHz of spectrum.

Guidelines for applicants: The DoT has also slated specific guidelines, and criteria for both existing telecom operators and new entrants. Any organization that holds a UASL, CMTS, UL license; and any organization that fulfills, or at least provides an undertaking to fulfill the eligibility conditions mentioned in UL License are can participate in the upcoming auctions. More here.

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