The much-awaited 5G spectrum auction will bring significant advancements for the industry and consumers, market watchers said on Wednesday. However, some said the base price for spectrum remained an issue for bidders, who were expecting much lower rates.
The auction and steps outlined for bidding would open up newer avenues for deeper penetration, access and rich user experience, said Peeyush Vaish, partner and Telecom Sector Leader, Deloitte India.
He noted that the government had also announced an auction of the millimetre-wave (mm-wave) band, which would not only help unlock the ‘true’ potential of 5G but would also help strategically manage costs for the operators.
"The roads are now clear for the 5G auctions. This is probably one of the most awaited spectrum auctions, which will bring significant advancements for the industry and the consumers," Mr. Vaish said, adding that the good part was that spectrum across bands would go under the hammer shortly.
Another aspect which would spur ‘a good auction’ was that operators would have the flexibility to surrender the spectrum after 10 years without any liabilities.
“To boost technological advancement, the government has also announced the development of private networks, which will pave the way for Industry 4.0 applications. Together, these steps will open up newer avenues for deeper penetration and access, rich user experience via consolidation as well,” he said.
Jaideep Ghosh, chief operating officer of Shardul Amarchand Mangaldas & Co, said the wide availability of spectrum across all bands was encouraging, as potential bidders could opt for spectrum bands and quantum as per their strategy.
"Having said that, the base prices for spectrum remain an issue for the bidders who were expecting a much lower price," Mr. Ghosh added.
The analyst comments came after the Union Cabinet approved the auction of airwaves capable of offering fifth-generation, or 5G, telecom services, including ultra-high-speed Internet, and gave its nod to set up of captive 5G networks by big technology firms.
The auction of more than 72 GHz of spectrum will be held by July end, the government said in an official statement, detailing the decision taken by the Cabinet at its meeting held on June 14.
The spectrum auction will commence on July 26, 2022.
The cabinet has approved 5G auctions at reserve prices recommended by the sector regulator Telecom Regulatory Authority of India (TRAI).
In April this year, TRAI had recommended an about 39% reduction in the reserve, or floor, price for the sale of 5G spectrum for mobile services, although the industry at that time had termed the cost as being "too high".
