The Department of Telecommunications (DoT) will officially begin the auction process on July 26 and will allow enterprises to bid for spectrum, much to the operators’ chagrin
Indian operators have been waiting to be allocated 5G spectrum for a long time, with the necessary spectrum auction facing numerous delays over the past two years, from the onset of the coronavirus to clashes between telcos and regulators over pricing.
Now, it seems that the wait may finally be over, with the Indian Union Cabinet approving the terms of the auction and announcing it will begin on July 26.
The auction is set to make 72GHz of spectrum available in the 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1.8 GHz, 2.1 GHz, 2.3 GHz, 3.3 GHz, and 26 GHz bands, giving operators a broad palette of 5G flavours with which to offer commercial services.
The reserve price for the total spectrum is set at roughly $12.8 billion, having been lowered on average by 39% at the recommendation of Telecom Regulatory Authority of India (TRAI). Operators had previously argued that spectrum was so expensive that it should be reduced by up to 90%, with some operators, including Bharti Airtel, saying they would not bid at all if the price was not considerably reduced.
Nonetheless, all three of the country’s major operators – Reliance Jio, Bharti Airtel, and Vi (formerly Vodafone Idea) – are expected to take part. All of these operators have been conducting technical trials with temporarily allocated 5G spectrum since May last year.
The spectrum licences will be valid for a period of 20 years, with the regulator removing the Spectrum Usage Charges for the acquired spectrum, aiming to ease the financial burden of network operation for the telcos. There will also be no obligations for the operators to pay for the spectrum up front, instead giving them the option to pay in 20 equal monthly instalments to help their cash flow.
The changes come as part of wider reforms to the Indian telecoms sector that were announced in September last year.
But perhaps the most interesting part of this new auction will be that 5G spectrum is set to be made available to private enterprises for the first time, allowing them to build and operate ‘Private Captive Networks’ for industrial partners, the first step towards developing smart factories, hospitals, ports, and more.
This is a controversial decision, with the operators previously arguing against the decision saying that it would create an unlevel playing field and cut into their revenues.
“We are of the firm opinion that notwithstanding any advancement of technologies, there is no justification whatsoever for allocating spectrum to industry verticals for operating private captive networks,” said the Cellular Operators Association of India (COAI) in a statement, noting that the operators were “fully capable of providing all customized solutions including M2M / Industrial 4.0 services in the most competitive and economic manner”.
Regardless of the telcos misgivings, the auction marks a major milestone for the Indian telecoms industry, with 5G being vaunted as keystone in numerous government programmes including Digital India, Start-up India, Make in India.
In a tweet, Ashwini Vaishnaw, Minister for Railways, Communications, Electronics & Information Technology, said that the auction would be “the beginning of a new era” for the Indian telecoms sector and will be “an integral part” developing the Indian 5G ecosystem.
— Ashwini Vaishnaw (@AshwiniVaishnaw) June 15, 2022
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