The Union Cabinet has approved a proposal of the Department of Telecommunications (DoT) to conduct spectrum auction through which spectrum will be assigned to the successful bidders for providing 5G services to public and enterprises.
A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction to be held by the end of July, 2022. The auction will be held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands.
Providing further detail, the Cabinet mentioned that requirement to make upfront payment by the successful bidders has been done away with. Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year. Also, the bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance instalments.
Besides, the availability of sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To this end, the Cabinet has decided to provisionally allot 2 carriers of 250 MHz each in E-band to the TSPs. The Cabinet also decided to double the number of traditional Microwave backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz bands.
Additionally, the Cabinet has decided to enable the development and setting up 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), artificial intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.
Industry reactions:
Commenting on the development, Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India, said, “The roads are now clear for the 5G auctions. This is probably one of the most awaited spectrum auctions which will bring significant advancements for the industry and the consumers. The good part is that the spectrum across bands will go under the hammer shortly. The government has also announced auction of mm Wave band which will not only help in unlocking the true potential of 5G, but will also help strategically manage costs for the operators. Another aspect which will spur a good auction is that the operators will have the flexibility to surrender the spectrum after 10 years without any liabilities. To boost technological advancement the government has also announced development of private networks which will pave the way for Industry 4.0 applications. Together these steps will open up newer avenues for deeper penetration and access, rich user experience via consolidation as well.
Meanwhile, Jaideep Ghosh, chief operating officer, Shardul Amarchand Mangaldas & Co., said, “With the much awaited cabinet approval for 5G auctions in place, we can expect the auctions to be held sooner. Wide availability of spectrum across all bands is encouraging as potential bidders can opt for spectrum bands and quantum as per their strategy. Having said that, the base prices for spectrum remains an issue for the bidders who were expecting a much lower price. Clarity around captive spectrum allocation to enterprises directly has been another issue.”
