5G set to launch, Cabinet approves spectrum auction

5G set to launch: Following the Union Cabinet’s approval on Wednesday of a plan to sell over 72,000 megahertz (MHz), or 72 GHz, of airwaves with a validity duration of 20 years, the government has welcomed bid proposals for spectrum auctions commencing July 26 (moved from next month).

Spectrum in the 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 3,300 MHz, and 26 GHz bands will be auctioned off. The entire spectrum is worth more than Rs 5 lakh crore at a specified rate. A “simultaneous multiple rounds” rising model will be used for the e-auction. Bidders will be required to make an earnest money deposit before the auction, after which they will be assigned qualifying points. During the auction, the corporation will be able to use these eligibility points to put bids.

The Centre launched a telecom industry assistance package last year, and certain aspects of it have been included in the terms of this auction. The requirement that successful bidders make an advance payment has been eliminated. Spectrum payments can be made in 20 equal yearly instalments, payable in advance at the start of each year. Bidders would have the option of surrendering the spectrum after ten years, with no further obligations for balance payments.

According to the Notice Inviting Application (NIA) released by the Department of Telecommunications (DoT) on Wednesday, the government has left the reserve price of 5G airwaves constant, which might be a possible blow to operators.

The reserve price of airwaves has been reduced by nearly 90% from 2018 levels, according to telecom companies. However, in keeping with the Telecom Regulatory Authority of India’s (Trai) recommendations, the Cabinet’s final decision includes a price cut of roughly 35-40%. Last month, the Digital Communications Commission (DCC) adopted Trai’s recommended basic cost for the spectrum.

The regulatory board had recommended that the basic pricing for the premier 5G band of 3,300-3,670 MHz be maintained at Rs 317 crore per MHz, which is 35% less than the base price of Rs 492 crore per MHz declared in 2018.

Similarly, Trai recommends a price of Rs 3,297 crore for the 700 MHz band, which is about 40% less than the price proposed in 2018. The Centre has also made it possible for IT businesses to get spectrum directly from it to test and develop industry 4.0 applications such as machine-to-machine communications, the Internet of Things, and artificial intelligence.

While telecom carriers have historically criticised the notion of a private network, citing the possible loss of income, corporations like Tata Consultancy Services (TCS) have shown interest in developing these non-public 5G networks. The general public will not be able to access these networks. The Department of Transportation stated it will conduct demand assessments and then seek TRAI recommendations for direct spectrum allotment to such businesses.

In addition, the government has planned to expand the number of microwave backhaul carriers in the existing frequency bands of 13, 15, 18, and 21 GHz. This was done because high-bandwidth telephone services, such as 5G, require more backhaul capacity to work properly.

The government stated in a statement that it has decided to temporarily assign two 250-MHz carriers in the E-Band spectrum and double the number of conventional microwave backhaul carriers in current frequency bands. There are now 2,090 microwave backhaul carriers available across these frequencies.

Microwave frequencies are often assigned in paired chunks of 28 MHz for usage as backhaul spectrum in wireless communication networks that operate on point-to-point connectivity. Microwave backhaul carriers are the names given to these frequencies. These are often attributed to short-haul systems that transport traffic over small distances.