5G Spectrum Auction: The Start of a New Era for Indian Telecom Operators
4G took the world by storm, and it did great things for India. 4G might have started the revolution, bringing affordable connectivity to everyone. By higher speed, lower latency and greater capacity than 4G LTE networks 5G is one of the fastest, most robust technologies the world has ever seen. The 4G ecosystem created in the country is now leading to 5G indigenous development. To speed up the launching of the domestic 5G technology in India, the government set up eight 5G test beds in eight top technology institutes. The PLI (Production-Linked Incentives) schemes that are available for mobile handsets, telecom equipment and the launch of the India Semiconductor Mission is expected to help build a strong ecosystem for the launch of 5G services in India. We can see India in the list of leading countries in the field of 5G technologies as well as the upcoming 6G. The latest edition of 5G spectrum of India has pooled a total of 72097.85 MHz of spectrum with a validity period of 20 years and will be put to auction by the end of July, this year. The frequency of the spectrum will be Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands.
Potentials of 5G Services
The path breaking initiatives by the Government of India such as Digital India, Start-up India, and Make in India etc., is able to promote access to mobile banking, online education, telemedicine, e-Ration etc to Antyoday families. Mobile broad bands, have become integral part of the daily lives of the citizens and received a huge path through the rapid expansion of 4G services across the country since 2015. Around eighty crore subscribers have access to broadband today compared to 10 crore subscribers in 2014.
The 5G spectrum auction is the beginning of a new era for Indian Telecom. Moving forward with PM Narendra Modi ji's vision of a Digital India. Spectrum auction announced today is an integral part of developing the Bharat Ka 5G ecosystem
Telecom Service Providers Taking Part in the Spectrum Bidding
As the countdown for the 5G era begins, the telecom players such as Vodafone Idea, Bharti Airtel Ltd and Reliance Industries Ltd's Jio are enthusiastic to participate in the spectrum. The latest news that the DoT confirmed there will not be SUC (Spectrum Usage Charge) charges in different Access spectrum bands.
Ashwini Vaishnaw, IT Minister, India says, “The 5G spectrum auction is the beginning of a new era for Indian Telecom. Moving forward with PM Narendra Modi ji's vision of a Digital India. Spectrum auction announced today is an integral part of developing the Bharat Ka 5G ecosystem. No mandatory requirement to make upfront payment by the successful bidders. Payments in 20 equal annual installments, Relief in bank guarantee. In line with the Telecom Reforms in September 2021, zero Spectrum Usage Charges (SUC) on the spectrum acquired in the upcoming auction. Continuing the Telecom Reforms, development and setting up of Private Captive Networks will be enabled.”
How Could Telecom Sectors Get Benefits?
The spectrum auction will be benefited by the Telecom Sector Reforms announced last year. The refinements 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. Furthermore the requirement of submitting a financial bank guarantee equivalent to one annual installment has also been done away with. Continuing the pace of Telecom Sector reforms, the Cabinet announced various progressive options with regard to the spectrum to be acquired by bidders through the forthcoming spectrum auction for facilitating ease of doing business. For the first time ever, there is no mandatory requirement to make upfront payment by the successful bidders. Payments for spectrum can be made in 20 equal annual installments to be paid in advance at the beginning of each year. This is expected to significantly ease cash flow requirements and lower the cost of doing business in this sector. The bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance installments. The availability of sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To meet the backhaul demand, the Cabinet has decided to provisionally allot 2 carriers of 250 MHz each in E-band to the Telecom Service Providers. 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.
Recap of Spectrum Auction 2021
In 2021 the government hosted the spectrum for seven bands such as 700 MHz, 800Mhz, 900Mhz, 1,800Mhz, 2,100Mhz, 2,300Mhz and 2,500Mhz. According to analysts, Bharti Airtel and Reliance Jio did pretty well in acquiring the spectrum that will serve them well towards the improvement of their networks. The ministry of IT affairs decides 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 communications, Internet of Things (IoT), AI across automotive, healthcare, agriculture, energy, and other sectors.