The decks have been cleared for the much-awaited 5G telecom spectrum auctions as the Cabinet has approved the Department of Telecommunications’ (DoT) proposal to assign spectrum to successful bidders for providing 5G services to the public and enterprises.
“Spectrum is an integral and necessary part of the entire 5G eco-system. The upcoming 5G services have the potential to create new-age businesses, generate additional revenue for enterprises and provide employment arising from the deployment of innovative use-cases and technologies,” the government said in a statement.
A total of 72,097.85 MHz of spectrum with a validity period of 20 years will be put to auction by the end of July 2022. Spectrum in various frequency bands — low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz), mid (3,300 MHz), and high (26 GHz) — will be auctioned.
The sale value as per the base reserve prices is around ₹4.5 lakh crore. The Cabinet has gone ahead with the pricing recommendations of the Telecom Regulatory Authority of India (TRAI).
“It is expected that the mid and high band spectrum will be utilised by telecom service providers (TSPs) to roll-out 5G technology-based services capable of providing speed and capacities which would be about 10 times higher than what is possible through the current 4G services,” the statement said.
The Cabinet also decided to enable the creation of private captive networks to spur a new wave of innovations in Industry 4.0 applications such as machine-to-machine (M2M) communications, Internet of Things (IoT), and artificial intelligence (AI) across the automotive, healthcare, agriculture, energy, and other sectors, it said.
BusinessLine had, on June 13, reported that DoT had agreed to give telecom spectrum to captive players for the private use of airwaves in campuses like factories, hotels and universities.
Two major industry bodies have been fighting over this — the Broadband India Forum (BIF) wants the spectrum allocated to private captive enterprises, while the Cellular Operators’ Association of India (COAI) wants it for TSPs.
Sufficient backhaul spectrum is needed for the roll-out of 5G services. To meet this requirement the Cabinet decided to provisionally allot to TSPs two carriers of 250 MHz each in the E-band. It also decided to double the number of traditional microwave backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz, the statement said.
For the first time, there is no mandatory requirement for upfront payment by the successful bidders. Payments for the spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year. This is expected to ease cash flow requirements and lower the cost of doing business. The bidders would be given the option to surrender the spectrum after 10 years with no future liabilities on the balance instalments, it said.
“The spectrum auction will be benefitted by the Telecom Sector Reforms announced in September, 2021. The reforms include zero Spectrum Usage Charges (SUC) on the spectrum acquired in the upcoming auction, providing a significant relief to the service providers in terms of the operating cost of telecom networks. Further, the requirement of submitting a financial bank guarantee equivalent to one annual instalment has also been done away with,” it added.