Union Finance Minister Nirmala Sitharaman while announcing the Union Budget earlier this year had said that roll out of 5G network in India will take place in financial year 2022-2023. Now, after months of delay, the Union Cabinet finally approved a proposal by the Department of Telecommunications (DoT) to conduct auctions for 5G spectrum in India. Also Read - Govt approves 5G spectrum auction: 5G internet to roll out soon in India
“Spectrum is an integral and necessary part of the entire 5G eco-system. 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,” DoT said on making the announcement. Also Read - Volkswagen Virtus launched in India at Rs 11.21 lakh: Check variants, other details
“The beginning of a new era for Indian Telecom. 5G spectrum auction announced,” Minister of Communications, Ashwini Vaishnaw said on the ocassion. Also Read - Indian govt to roll out indigenous 5G tech by August 2022: Devusinh Chauhan
The beginning of a new era for Indian Telecom.
5G spectrum auction announced. #BharatKa5G
— Ashwini Vaishnaw (@AshwiniVaishnaw) June 15, 2022
The Union Cabinet, in addition to approving the sale of 5G spectrum also share eligibility criteria for participation in the 5G spectrum auction. Additionally, it shared guidelines for surrendering the spectrum. So, here is everything you need to know about the upcoming 5G spectrum auctions in India.
What are the key dates for 5G spectrum auction in India
DoT has set June 22 as the last date for seeking clarifications on Notice of Inviting Applications (NIA) and June 30 and the date when these clarifications will be made public.
The ministry has July 8 as the last date for submission for applications for bids, post which DoT will publish ownership details of the participants on July 12. DoT will share the final list of bidders on July 20 and it will host mock auctions on July 22 and July 23.
The ministry will conduct spectrum auction on July 26.
What all spectrums are being auctioned?
DoT is auctioning a total of 72097.85 MHz of spectrum at the upcoming auctions. 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.
In addition to the primary spectrum, DoT has also made provision for the availability of sufficient backhaul spectrum, which is necessary to enable the roll-out of 5G services. The Cabinet has decided to provisionally allot two carriers of 250 MHz each in E-band to the telecom service providers, which includes Reliance Jio, Bharti Airtel and Vodafone Idea, in India. 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.
Apart from this, the cabinet has also made provision for development and setting up of Private Captive Networks — a move that telecom operators in the country were opposed to — in a bid 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.
What about the spectrum pricing?
As far as the spectrum pricing is concerned, the Centre has left the reserve price of the 5G waves in India unchanged. Telecom operators in the country had sought a 90 percent cut in the reserve price of the 5G spectrum. The Telecom Regulatory Authority of India (TRAI) in its recommendations that it shared back in April this year, had slashed the prices by 39 percent on an overall basis.
With this, the base price of a unit of spectrum in the 2.3-3.7GHz (C-band) has been set to 317 crores. The price of the 700MHz spectrum, on the other hand, has beem set to Rs 3,297 crores.
In a bid to reform the telecom sector and make the pricing sustainable, the government has included zero Spectrum Usage Charges (SuC) on the spectrum acquired in the upcoming auctions.
What is the eligibility criteria?
As far as eligibility criteria is concerned, DoT has set the net worth eligibility for bidders at Rs 100 crore per License Service Area. However, there is an exception of Jammu and Kashmir and North East, wherein the net worth criteria is set to Rs 50 crore.
DoT has also set a lock-in period of one year from the date if submission of application.
Notably, net worth requirement is applicable for new entrants only and it is not applicable for xisting license holders such as Jio and Airtel. Also, a new entrant will have to show a net worth of Rs 100 crore (or Rs 50 crore based on the region) for bidding in any/all bands.
What is surrender of spectrum?
The government has also made changes to the guidelines for surrendering the spectrum. The government is removing the mandatory requirement to make upfront payment by the successful bidders. Instead, telecom operators can make payments for spectrum in 20 equal annual instalments to be paid in advance at the beginning of each year. Also, DoT said that the bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance instalments.