EXPLAINER Technology

Auctioning 5G spectrum bands

The auctions are scheduled to commence from July 26

The auctions are scheduled to commence from July 26 | Photo Credit: Getty Images

The story so far: The Union Cabinet, chaired by Prime Minister Narendra Modi, gave its nod for the auction of spectrum that can be used to offer 5G services, at its meeting held on June 14. A total of 72,097.85 MHz (or 72 Ghz) of spectrum with a validity period of 20 years will be put on sale during the auction planned towards the end of July. 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 expected that the Mid and High band spectrum will be utilised by telecom service providers (TSPs) to roll-out 5G services wherein speeds would be 10 times higher than what is possible through the current 4G services. This follows the Budget 2022 announcement by Finance Minister Nirmala Sitharaman that the government would auction telecom spectrum in 2022, which will enable private players to roll out 5G services before March 2023.

When will the spectrum be auctioned?

The auctions are scheduled to commence from July 26. The Department of Telecom has invited applications from prospective bidders to participate in the auctions. Based on the applications, the government will pre-qualify applicants who meet the eligibility criteria.

When will the commercial roll-out happen?

Telecom Minister Ashwini Vaishnaw recently said that the 5G deployment is likely to start from August-September this year, and service should commence in about 20-25 cities by the year-end.

Experts and analysts expect a gradual roll-out of 5G across the country in a phased manner over the next two to three years, with roll-outs beginning from the second half of the current year.

“Given the operator's public statements, nascent 5G device penetration and limited use cases, we expect a more gradual 5G roll out by telcos over the next 2-3 years,” according to a note by Credit Suisse. Likewise, Nomura in a research note has said that relief measures by the government, such as scrapping of spectrum usage charges (SUC) for future spectrum auctions and moratorium on deferred spectrum payments and Adjusted Gross Revenue (AGR) dues has considerably eased the pathway for 5G rollouts in India. “...we think 5G rollouts would commence in 2HCY22F. However, given the nascent 5G ecosystem and evolving use cases, we think 5G rollouts would likely be granular starting with metros and larger cities,” Nomura added.

What are the key issues?

The two issues that the industry has highlighted with regards to the upcoming auctions are high reserve prices for the spectrum and direct allotment of spectrum to enterprises for setting up captive private networks.

The government has accepted the recommendations given by the Telecom Regulatory Authority of India (TRAI) on reserve prices for spectrum auctions. While the TRAI had earlier recommended reducing prices of airwaves across various bands by 35-40% from its earlier proposed base price, the telecom operators had expressed disappointment given their demand for a 90% cut in the prices. “At these prices, a block of 5MHz spectrum (paired) in the 700MHz band will cost ₹196bn (US$2.5bn), 50MHz block in the 3.4GHz band will cost ₹159bn (US$2bn) and 400MHz block in the 26GHz band will cost ₹28bn (US$0.4bn),” according to Credit Suisse.

On allowing direct allocation of spectrum for captive non-public networks, the government has reasoned that the move will 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. However, the Cellular Operators Association of India (COAI), which counts the three private telcos as its members, has said that the move severely degrades the business case of TSPs. “This will diminish the revenue so much that there will be no viable business case left for the TSPs and there will not remain any need for 5G networks roll-out by TSPs,” it had said before the Cabinet decision.

What benefits are likely to come with 5G?

5G is the next generation cellular technology that will provide faster and more reliable communication with ultra low latency. As per the set standards, with 5G, the peak network speeds are expected to be in the range of 2-20 Gbps as opposed to about 25 Mbps on current 4G networks. In India, however, 4G speeds average at around 6-7 Mbps, but are picking up gradually.

It is expected that with 5G technology, consumers will be able to download data heavy content such as 8K movies and games with better graphics in just a few seconds. The users will need to update to 5G-enabled devices to access the network, if they are not already using one. However, it is likely that the primary use of the technology will go beyond delivery of services on personal mobile devices. 5G is expected to form the backbone of emerging technologies such as IoT and machine to machine communications, thereby supporting a much larger range of applications and services, such as tele-surgery and real time data analytics. Ultra low latency offered by 5G makes the technology desirable for such use cases. Latency is the amount of time data takes to travel between its source and destination.

As per a report by a government panel on 5G, even after the entry of 5G into the Indian networks, the earlier generation mobile technologies — 2G, 3G and 4G, will continue to remain in use and may take 10 or more years to phase out. 5G is expected to create a cumulative economic impact of $1 trillion in India by 2035, the report added.

THE GIST
The Union Cabinet gave its nod for the auction of spectrum that can be used to offer 5G services, at its meeting held on June 14. A total of 72 Ghz of spectrum with a validity period of 20 years will be put on sale towards the end of July.
The two issues that the industry has highlighted with regards to the upcoming auctions are high reserve prices for the spectrum and direct allotment of spectrum to enterprises for setting up captive private networks.
5G is expected to form the backbone of emerging technologies such as IoT and machine to machine communications, thereby supporting a much larger range of applications and services, such as tele-surgery and real time data analytics. 


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Printable version | Jun 19, 2022 10:15:44 pm | https://www.thehindu.com/sci-tech/technology/auctioning-5g-spectrum-bands/article65542770.ece