The Prime Minister has approved the Department of Telecommunications’ proposal to conduct 5G spectrum auctions to speed up the development and deployment of 5G services in the country. Digital connectivity has been an important part of the government’s policy initiatives through programmes like Digital India, Start-up India, and Make in India.
A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction by the end of July this year. 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. Telecom service providers will use mid and high-band spectrums to roll out 5G technology-based services capable of providing speed and capacities ten times higher than what is possible through the current 4G services.
Broadband, especially mobile broadband, has become an integral part of life. Its adoption was accelerated through the rapid expansion of 4G services across the country since 2015. Currently, 800 million subscribers have broadband access, compared to 100 million subscribers in 2014. According to a press release, through policy initiatives, the government has been able to give citizens access to mobile banking, online education, and telemedicine, among others.
The 4G ecosystem is now leading to 5G indigenous development. The 5G testbeds in eight technology institutes are speeding up the launch of domestic 5G technology in India. The PLI (Production-Linked Incentives) schemes for mobile handsets and telecom equipment and the launch of the India Semiconductor Mission are expected to help build a strong ecosystem for the launch of 5G services.
The release stated that the Telecom Sector Reforms announced last September will benefit bidders at the spectrum auction. The reforms include zero spectrum usage charges (SUC) on the spectrum acquired in the upcoming auction, providing 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 been removed.
The government announced that, for the first time, there will be no mandatory requirement to make upfront payments by 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 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 concerning balance instalments. The availability of a sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To meet the backhaul demand, the government has decided to provisionally allot two carriers of 250 MHz each in E-band to telecom service providers. The government also decided to double the number of traditional Microwave backhaul carriers in the existing frequency bands of 13, 15, 18, and 21 GHz bands.
Further, the government will 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, the Internet of Things (IoT), and artificial intelligence (AI) in the automotive, healthcare, agriculture, energy sectors.
