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Spectrum Auction Continues, Upfront Payments Could be Pushed to FY16

Spectrum Auction Continues, Upfront Payments Could be Pushed to FY16

By Press Trust of India | Updated: 23 March 2015 11:51 IST

With the spectrum auction entering the 17th day, the government may not get all of the upfront Rs. 25,000 crore revenue from the sale it was expecting this fiscal.

The auction has so far got bids worth Rs. 1.07 lakh crore, of which one-fourth is to be paid within 10 days of close of sale. But with the auction entering the 17th day on Sunday, the cut of date for this payment will push into April.

If the auction could have ended on Saturday, the government would have got over Rs. 25,000 crore as the upfront payment by March 31. Now, operators will have time until April - the next financial year - to make the upfront payment.

At the end of 16 days of auction, the amount of bids stood at Rs. 1.07 lakh crore with provisional allocation of 88 percent airwaves.

This, however, does not mean that government will not get any upfront payment. Sources in the Department of Telecom said that 10 days is the maximum limit and operators can deposit the amount earlier also.

Sources said the operators who are bidding must have put in place a mechanism to fund their auction payouts and they can deposit the amount in few days of close of auction.

As per auction document, in case of deferred payment option, telecom operators are required to pay an upfront payment of 33 percent in case of 2100MHz, 1800MHz bands and 25 percent for 900MHz and 800MHz bands within 10 calendar days of the close of auction.

The sources added that Finance Ministry has also enquired about the status of auction on Saturday.

The government is committed to restricting the fiscal deficit at 4.1 percent of the GDP during the current fiscal, the lowest level in seven yeaRs., and has taken several steps towards it.

It had put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3 percent of the GDP by 2016-17. To reduce the fiscal deficit to seven-year low, it has also announced a slew of austerity measures aimed at cutting non-plan spending by 10 percent.

Sources said about 5-6 circles witnessed activity with aggressive bidding in three circles of premium 900MHz band.

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