New Delhi, Dec 16 (UNI) The Union Cabinet on Wednesday approved a proposal of the Department of Telecommunications to conduct the next round of spectrum auction for commercial mobile services.

Addressing mediapersons here, Minister of Communications Ravi Shankar Prasad said the auction will be for spectrum in 700, 800, 900, 1800, 2100, 2300 and 2500 MHz frequency bands. Spectrum will be offered for assignment for a validity period of 20 years. A total of 2251.25 MHz is being offered with a total valuation of Rs 3,92,332.70 crore (at reserve price).

By winning the right to use spectrum through the auction, incumbent telecom service providers will be able to augment their network capacity whereas new players can start their services.

Successful bidders can pay the entire bid amount in one go (upfront) or may exercise an option to pay a certain amount and remaining in 16 equated annual installments, after a moratorium of two years.

In addition to the bid amount, successful bidders will also have to pay 3 per cent of the Adjusted Gross Revenue (AGR) as spectrum usage charges.

Sufficient spectrum availability increases the quality of telecom services for the consumers.

'It is relevant that the telecom sector today is a key infrastructure provider with strong linkages with economic growth, direct and indirect employment generation and expansion of Digital India. Hence the above decision of the Cabinet is expected to have a salutary impact on all the aspects,' Ministry of Communications said in a statement.

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