The Telecom Regulatory Authority of India (TRAI) has released a consultation paper on “Auction of spectrum in the frequencies identified for international mobile telecommunications (IMT)/5G”.
Earlier, the Department of Telecommunications (DoT), through a letter, had requested TRAI to provide recommendations on the subject. Subsequently, DoT, through another letter, revealed the government’s telecom reform decisions with regard to future spectrum auctions and requested TRAI to consider the same while providing recommendations.
To this end, TRAI has floated the consultation paper seeking inputs from stakeholders. The deadlines for submitting written comments and counter-comments are December 28, 2021 and January 11, 2022 respectively.
The consultation paper discusses the availability of spectrum in the 500 MHz, 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz and 24.25-28.5 GHz bands for IMT. It also deals with policy issues such as band plan, block size, roll-out obligations and spectrum cap. Further, it discusses alternative approaches to valuation of spectrum in the 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz and 24.25 to 28.5 GHz bands, as well as fixation of reserve price. Lastly, it also deals with issues related to spectrum for private cellular networks.
Auction-related issues
DoT has announced that the 526-582 MHz, 582-617 MHz and 617-698 MHz bands have been chosen for IMT/5G. While the use of the 526-582 MHz band will be coordinated to ensure minimum keep-out distance from the Ministry of Information and Broadcasting transmitters, the 582-617 MHz band will be available for IMT/5G and rural point-to-point links. Further, the 617-698 MHz band will be used in all the licensed service areas except for a few areas/locations. Further, DoT has clarified that in the case of auction of spectrum in this band, the right to use spectrum should be assigned exclusively to the successful bidder.
Meanwhile, although the International Telecommunication Union (ITU) has identified spectrum in the 470-698 MHz band for IMT in Region 2 and Region 3, frequency arrangement for the 526-582 MHz and 582- 617 MHz bands has not been defined by it. On examination of the band plans defined by 3GPP, it appears that none have been defined so far for the 526-582 MHz and 582-617 MHz bands. Thus, the ecosystem for IMT is not available in these bands. As for the 617-698 MHz band, ITU and 3GPP has defined a frequency arrangement with frequency division duplex configuration, namely, band 71/n71, also known as US 600. In view of these, TRAI has sought views on whether it would be appropriate to include the 526-582 MHz, 582-617 MHz and 600 MHz spectrum bands in the forthcoming auction.
In addition to the above-mentioned bands, the 3300-3670 MHz band has emerged as prime spectrum for 5G. Considering the global trends, this spectrum is likely to be used for deploying 5G in India. To this end, the regulator has also sought views on which band plan should be adopted in India for the 3300-3670 MHz frequency range.
Valuation and reserve price of spectrum
In September 2021, the union cabinet approved structural and procedural reforms in the telecom sector. These reforms are expected to provide financial and economic benefits to the sector. They include certain spectrum- and auction-related reforms such as removal of the requirement of bank guarantees to secure instalment payments, which may lead to increased participation in auctions, as it will increase the financial headroom for potential bidders. The increased tenure of the spectrum allotment from the existing 20 years to 30 years will enable telecom service providers (TSPs) to exploit spectrum benefits over a longer period. The elimination of the spectrum usage charge on spectrum acquired in future auctions will result in the direct financial benefits by lowering the regulatory expenditure for acquiring a certain quantum of spectrum. This may result in the reduction of spectrum usage charges for the incumbents once they acquire new spectrum. To this end, TRAI has sought views on which factors are relevant in the spectrum valuation exercise, and in what manner these factors should be reflected in the valuation of spectrum.
Further, prior to this, DoT had sought recommendations on the applicable reserve price of spectrum in the 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz and 24.25-28.5 GHz bands for IMT/5G. To this end, TRAI has asked stakeholders if there is a need for a fresh valuation exercise instead of using the March 2021 auction-determined prices in the 800 MHz/900 MHz/1800 MHz/2100 MHz/ 2300 MHz bands.
Spectrum for private cellular networks
The private long term evolution (LTE) market is robust, with deployment activities being carried out across many sectors globally. Private LTE systems take advantage of the global LTE ecosystem, which benefits from high volumes, standardised technology and well-established suppliers able to design and deploy networks. Private 5G is arriving with the promise of enabling new, innovative use cases that will bring great value to enterprises across different industries. As such, more and more enterprises are realising that the conventional choices for deploying wireless broadband connectivity – Wi-Fi or public cellular networks – are not delivering the efficiency, control and security they need to satisfy the demands of their business operations. In contrast, private LTE and 5G networks for enterprises bring distinct benefits, especially for business-critical and security-critical applications.
DoT, through its reference vide letter dated September 13, 2021 has requested TRAI to provide recommendations on the quantum of spectrum/bands that should be earmarked for private captive 5G networks, the method of allocation and the pricing that should be adopted for meeting the spectrum requirements for captive 5G applications of industries.
The need for spectrum for private networks can be met in many ways, such as using unlicensed spectrum, leasing of spectrum by TSPs to the private entities and earmarking some dedicated spectrum for private captive networks.
Unlicensed spectrum can be used by an organisation to operate private networks, subject to regulatory conditions. Though these spectrums are widely available and easy to access, there is the possibility of interference from other users, making organisations reluctant to rely on them for production-critical networks. Currently in India, the 2.4 GHz and 5 GHz bands are unlicensed.
The spectrum leasing option allows a TSP with exclusive spectrum usage rights to lease, in part or in its entirety, its spectrum holding to an enterprise for localised captive use for a specified period and geography. The rights get transferred to the transferee entity and revert to the transferor after expiry of the leasing period. So far, leasing of spectrum is not permitted in India. To this end, TRAI has asked stakeholders whether TSPs should be permitted to provide spectrum on lease to enterprises for localised captive use, for a specific duration and geographic location, to meet the demand for spectrum in globally harmonised IMT bands for private captive networks.
Regulators may also earmark some quantum of spectrum in harmonised IMT bands for private captive networks. Such spectrum, assigned to enterprises, is utilised within a limited geographic area. To this end, TRAI has sought views on whether some spectrum should be earmarked for localised private captive networks in India.
Conclusion
Telecom connectivity has played an important role in the digitalisation and automation of processes in almost all sectors. The telecom network in India is now moving towards complete transformation with the deployment of 5G cellular technology. With high speed, low latency and high device density, the ultra-reliable 5G technology can have applications across different economic verticals, and these applications are now commercially feasible and available. 5G technology, coupled with internet of things, artificial intelligence, machine learning and data analytics, has given rise to numerous use cases covering almost every economic vertical such as healthcare, agriculture, transport, education, industry, mines and ports. To actualise the likely benefits from the implementation of 5G, it is imperative that the issues associated with 5G spectrum, such as spectrum band and reserve price, are resolved quickly.
By Diksha Sharma
