Govt clears 5G spectrum auction; process by July-end

New Delhi, June 15

The Centre has cleared the decks for the mega auction of airwaves to usher in the era of 5G services, which could fetch the exchequer over Rs 1 lakh crore over 20 years. The Union Cabinet on Tuesday approved the Department of Telecommunications (DoT) proposal for the auction of 72 GHz of frequency over nine bands next month. After the auction, the successful bidders will start testing their 5G services over the next few months and there will be limited public rollouts by the year-end. So far the four main carriers — BSNL, Vodafone Idea, Bharti Airtel, and Reliance Jio — have not shared any information on their plans.

Big tech companies like Google, which can bid for captive networks, are likely to be faster off the blocks than the four telecom service providers (TSPs) which face issues like rental for wayside base stations. The Cabinet turned down the DoT proposal for keeping these companies out which paves the way for companies with captive 5G networks to work on applications such as machine-to-machine communications, IoT and AI. Overall, the payment terms have been eased for bidders in the upcoming auction. “There will be no mandatory requirement to make upfront payments, which will be in 20 equal annual installments. There is also relief in bank guarantees,” said Union Communications Minister Ashwini Vaishnaw. Besides, the scrapping of spectrum usage charges (SUC) will also reduce the operating cost of telecom networks.

The TSPs are, however, unhappy as they wanted a 90% cut in base price of 2018 auction as well as a 30-year tenure for spectrum use. Instead, the Cabinet approved a 20-year licence period and around 39% average reduction on the 2018 prices.

The TRAI had recommended a reserve price of Rs 317 crore a unit for airwaves in the premium 3.3-3.67 GHz 5G 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 an average, TRAI cut prices across bands by around 39%.

Terms of payment eased

72097.85 MHz Spectrum to be auctioned

20-year duration Firms can surrender after 10 years

• Payment for spectrum can be made in 20 equal annual instalments; will ease cash flow requirements/lower cost of doing business