India plans $1.5 bln cellphone air waves auction in February - memo

MUMBAI Fri Aug 1, 2014 7:43am EDT

MUMBAI Aug 1 (Reuters) - India plans to hold an auction of airwaves for mobile phone network operators in February next year and aims to raise an initial $1.5 billion, according to a draft government plan seen by Reuters.

The Department of Telecommunications plans to sell radio wave frequencies in the 800, 900 and 1800 megahertz bands in the auction that is planned to open on Feb. 3, according to the memorandum.

The government is expecting to raise 93.55 billion rupees ($1.53 billion) from the auction during the current fiscal year ending March 2015 although total revenues from the auction would be much higher as carriers are required to pay up to a third of the winning price initially and the remainder in instalments over a number of years.

A spokesman for the Department of Telecommunications declined to comment.

Revenue from airwave sales is crucial to the government's efforts to cut its budget deficit. An airwave auction this year raised nearly $10 billion in total, with the government getting about $3 billion up front, far higher than what it had expected.

Leading carriers including Bharti Airtel Ltd, Vodafone Group Plc's local unit, Idea Cellular Ltd and Reliance Communications Ltd are required to bid in the auction to renew their permits in some service areas. ($1=60.8300 Indian rupees) (Reporting by Devidutta Tripathy and Nivedita Bhattacharjee; Editing by Greg Mahlich)