5G spectrum auction gets Cabinet approval: mega auction date, official rollout, and more

The press release says that digital connectivity has been an important part of policy initiatives of the Government through programs like Digital India, Start-up India, Make in India, etc.

5G spectrum auction approved

The 5G spectrum auction has been finally approved by the Union Cabinet. The press release says that the 4G ecosystem created in the country is now leading to 5G indigenous development. 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 in India.

The government of India believes that it will soon emerge as the leading country in the field of 5G technology and the upcoming 6G network. The upcoming 5G services have the potential to create new-age businesses, generate additional revenue for enterprises, and provide employment arising from the deployment of innovative use-cases and technologies.

A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction that will 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. It is believed that the Mid and High band spectrum will be utilised by Telecom Service Providers to roll out 5G technology-based services. These are said to be about 10 times higher than the current 4G services.

The spectrum auction will be benefitted from the Telecom Sector Reforms that were announced in September 2021. These include zero Spectrum Usage Charges (SUC) on the spectrum acquired in the upcoming auction and providing significant relief to the service providers in terms of the operating cost of telecom networks. 

As for the upcoming auction, 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 instalments to be paid in advance at the beginning of each year. This is sure will the sector with ease of cash flow requirements and lower the cost of doing business. The bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance instalments.

The availability of a sufficient backhaul spectrum is also necessary to enable the rollout 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.

The Cabinet also 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 communications, Internet of Things (IoT), Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.