5 g auction news paper article
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India will hold its first auction of 5G airwaves in July-end, pitting Jio, and to a lesser extent in a bidding battle, after the union cabinet cleared the sale of these ultra-high speed mobile internet frequencies. The government is putting 72GHz of 5G frequencies for sale and it could net up to Rs 4.5 lakh crore at base prices.
The government in a statement on Wednesday said it will auction spectrum for 20 years across nine bands ranging from 600 MHz to 26 GHz at prices recommended by the telecom regulator. While these prices are around 40% less than what the regulator had proposed in 2018, the telcos have been demanding a 90% reduction from the 2018 level.
The government, on its part, said the decisions to scrap the need for upfront payment for winning bidders and allowing payments in equal annual instalments over 20 years will ease financial outflows of telcos. It has also allowed surrender of spectrum after 10 years without any future liabilities. In addition, scrapping the spectrum usage charge (SUC) for airwaves to be bought in the upcoming sale as well as scrapping the need for bank guarantees will further ease the cost of doing business.
The cabinet also allowed enterprises to directly obtain spectrum from the Department of Telecommunications (DoT) for setting up private captive 5G networks. The government statement said private captive networks would spur a new wave of innovations in ‘Industry 4.0 applications’ such as machine-to-machine communications, internet of things (IoT), and artificial intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.
Telcos are opposed to spectrum being directly allotted to enterprises for setting up of these captive private networks and a senior telecom industry executive said that the government’s decision would deprive them of 5G enterprise business revenues, estimated at almost 40% of overall revenues.
Reliance Jio, Bharti Airtel, Vodafone Idea, and the Cellular Operators Association of India did not comment on the 5G auction announcement.
The auction of 5G spectrum marks the beginning of a new era for Indian telecom, communications minister Ashwini Vaishnaw tweeted on Wednesday.
"We will get a good response (in the auctions)," he added.
5G networks are capable of providing speed and capacities that are 10 times more than 4G networks, the government said. In addition to faster downloads for customers, these networks will facilitate industrial and enterprise applications across sectors, drive the growth of IoT and the creation of the metaverse, according to experts.
The Centre plans to auction spectrum in various low bands (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands, the government said in a statement Wednesday. Analysts expect Jio and to be the main buyers, with cash-strapped Vodafone Idea likely a fringe bidder.
According to the Notice Inviting Applications (NIA), the auction is slated to start on July 26. Among other key dates is the pre-bid conference slated for June 20, with the deadline for submission of applications on July 8, and pre-qualification of bidders on July 18. Mock auctions will be held on July 22 and 23.
The government said it expects mid and high-band spectrum to be used by operators to roll out 5G technology-based services. "The time is not far away when India is going to emerge as a leading country in the field of 5G technology and the upcoming 6G technology," it said.
India though is lagging the likes of China and South Korea in Asia who launched 5G networks a few years ago.
The government has stuck to the regulator’s recommended base prices for 5G airwaves. On April 11, the Telecom Regulatory Authority of India (Trai) had recommended a reserve price of Rs 317 crore a unit for airwaves in the premium 3.3-3.67 GHz 5G band (also known as C-band), a 36% reduction to its last recommendation in 2018. It had also cut the recommended price for the coveted 700 MHz spectrum by 40%, to Rs 3,297 crore a unit. On average, Trai cut prices across bands by around 39%.
The relaxed payment terms will ensure very low initial payment and avoid any dent on the liquidity position of telcos, Ankit Jain, vice president, corporate ratings, at ratings firm , said.
"This makes the basis for ICRA assumption of the participation in the upcoming spectrum auction to be around Rs 1-1.1 lakh crore, in which the upfront payment is likely to be close to Rs 10,000 crore only. Adding this to the existing payments, the industry needs to shelve out only Rs 17,000 crore annually towards spectrum instalments…," he added.
ICRA expects industry debt levels to increase to around Rs 5.7 lakh crore as on March 31, 2023, before moderating to Rs 5.3 lakh crore as on March 31, 2025. "The addition of deferred liabilities is expected to keep the debt levels elevated."
To meet backhaul demands, the Cabinet decided to provisionally allot 2 carriers of 250 MHz each in E-band to the operators. It also decided to double the number of traditional microwave backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz bands.
Backhaul has to do with connecting the core of a mobile network to nodes and then onto towers, to transmit data, elements that are critical for an effective 5G network. So in places where a telco can’t lay fibre – which requires manpower for laying and maintaining, national and local level permissions, besides a lot of investment – the E band spectrum can be used as a substitute, which is also more cost-efficient than fibre.
The government had mopped up Rs 77,814 crore from the last spectrum sale in March 2021, selling 37% of the over 2,300 units of airwaves across seven bands on sale. In the October 2016 auction, its collection at Rs 65,789 crore had been even less. In both the auctions, the coveted but pricey 700 MHz band went unsold as the bidding telcos felt they were overpriced.
The government in a statement on Wednesday said it will auction spectrum for 20 years across nine bands ranging from 600 MHz to 26 GHz at prices recommended by the telecom regulator. While these prices are around 40% less than what the regulator had proposed in 2018, the telcos have been demanding a 90% reduction from the 2018 level.
The government, on its part, said the decisions to scrap the need for upfront payment for winning bidders and allowing payments in equal annual instalments over 20 years will ease financial outflows of telcos. It has also allowed surrender of spectrum after 10 years without any future liabilities. In addition, scrapping the spectrum usage charge (SUC) for airwaves to be bought in the upcoming sale as well as scrapping the need for bank guarantees will further ease the cost of doing business.
The cabinet also allowed enterprises to directly obtain spectrum from the Department of Telecommunications (DoT) for setting up private captive 5G networks. The government statement said private captive networks would spur a new wave of innovations in ‘Industry 4.0 applications’ such as machine-to-machine communications, internet of things (IoT), and artificial intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.
Telcos are opposed to spectrum being directly allotted to enterprises for setting up of these captive private networks and a senior telecom industry executive said that the government’s decision would deprive them of 5G enterprise business revenues, estimated at almost 40% of overall revenues.
Reliance Jio, Bharti Airtel, Vodafone Idea, and the Cellular Operators Association of India did not comment on the 5G auction announcement.
The auction of 5G spectrum marks the beginning of a new era for Indian telecom, communications minister Ashwini Vaishnaw tweeted on Wednesday.
"We will get a good response (in the auctions)," he added.
5G networks are capable of providing speed and capacities that are 10 times more than 4G networks, the government said. In addition to faster downloads for customers, these networks will facilitate industrial and enterprise applications across sectors, drive the growth of IoT and the creation of the metaverse, according to experts.
The Centre plans to auction spectrum in various low bands (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands, the government said in a statement Wednesday. Analysts expect Jio and to be the main buyers, with cash-strapped Vodafone Idea likely a fringe bidder.
According to the Notice Inviting Applications (NIA), the auction is slated to start on July 26. Among other key dates is the pre-bid conference slated for June 20, with the deadline for submission of applications on July 8, and pre-qualification of bidders on July 18. Mock auctions will be held on July 22 and 23.
The government said it expects mid and high-band spectrum to be used by operators to roll out 5G technology-based services. "The time is not far away when India is going to emerge as a leading country in the field of 5G technology and the upcoming 6G technology," it said.
India though is lagging the likes of China and South Korea in Asia who launched 5G networks a few years ago.
The government has stuck to the regulator’s recommended base prices for 5G airwaves. On April 11, the Telecom Regulatory Authority of India (Trai) had recommended a reserve price of Rs 317 crore a unit for airwaves in the premium 3.3-3.67 GHz 5G band (also known as C-band), a 36% reduction to its last recommendation in 2018. It had also cut the recommended price for the coveted 700 MHz spectrum by 40%, to Rs 3,297 crore a unit. On average, Trai cut prices across bands by around 39%.
The relaxed payment terms will ensure very low initial payment and avoid any dent on the liquidity position of telcos, Ankit Jain, vice president, corporate ratings, at ratings firm , said.
"This makes the basis for ICRA assumption of the participation in the upcoming spectrum auction to be around Rs 1-1.1 lakh crore, in which the upfront payment is likely to be close to Rs 10,000 crore only. Adding this to the existing payments, the industry needs to shelve out only Rs 17,000 crore annually towards spectrum instalments…," he added.
ICRA expects industry debt levels to increase to around Rs 5.7 lakh crore as on March 31, 2023, before moderating to Rs 5.3 lakh crore as on March 31, 2025. "The addition of deferred liabilities is expected to keep the debt levels elevated."
To meet backhaul demands, the Cabinet decided to provisionally allot 2 carriers of 250 MHz each in E-band to the operators. It also decided to double the number of traditional microwave backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz bands.
Backhaul has to do with connecting the core of a mobile network to nodes and then onto towers, to transmit data, elements that are critical for an effective 5G network. So in places where a telco can’t lay fibre – which requires manpower for laying and maintaining, national and local level permissions, besides a lot of investment – the E band spectrum can be used as a substitute, which is also more cost-efficient than fibre.
The government had mopped up Rs 77,814 crore from the last spectrum sale in March 2021, selling 37% of the over 2,300 units of airwaves across seven bands on sale. In the October 2016 auction, its collection at Rs 65,789 crore had been even less. In both the auctions, the coveted but pricey 700 MHz band went unsold as the bidding telcos felt they were overpriced.
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