Telecom Department issues demand notes to telcos on spectrum bought in auctions

The Telecom Department on Monday issued demand notes to Reliance Jio, Bharti Airtel, and Vodafone Idea asking them to make stipulated payments for spectrum they bought in the just-concluded auctions, industry sources said. The demand note follows auctions raking-in winning bids of over ₹77,800 crore for 855.6 MHz of spectrum. 

Billionaire Mukesh Ambani's Reliance Jio spent the most in the auction, picking up 488.35 MHz spectrum in bands such as 800 MHz, 1800 MHz and 2300 MHz for over ₹57,100 crore. Industry sources said demand notes have been issued to the three telcos, and due date for stipulated payment is March 18. Sources said that for Bharti Airtel, the demand mentions that the company has won the right to use spectrum, the total value of which is about ₹18,703 crore. 

Alternately, the company can avail deferred payment option for about ₹6,323.9 crore towards immediate upfront payment, and ₹663.45 crore upfront payment for frequencies that are made available at a later date. 

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The specified due dates for second upfront payment and annual installment details, have also been mentioned in the demand notes. As per the auction terms, successful bidders can pay entire bid amount in one go, or exercise an option to pay a certain amount (25 per cent for spectrum won in 700 MHz, 800 MHz, 900 MHz bands or 50 per cent for spectrum won in 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz bands) upfront with remaining amount in a maximum up to 16 equated annual instalments, after a moratorium of two years. 

For Reliance Jio, the total value of spectrum acquired in the recent auction stood at about ₹57,124 crore. The company can avail deferred payment option and pay about ₹15,019.8 crore towards immediate upfront payment, while ₹4919.3 crore upfront payment is for frequencies available at later date, for which payment schedule has been laid down by DoT. For Vodafone Idea, the value of spectrum bought in auctions was at ₹1993.4 crore. 

Industry sources said that its deferred option entails payment of ₹574.6 crore as immediate upfront payment, and ₹103.50 crore for frequencies available at later date. The payment for the same is as per schedule laid down by DoT. There was no official confirmation from the companies, on the demand note.