The Department of Telecommunications (DoT) is now a step closer to auctioning the 5G spectrum. On Monday, the Telephone Regulatory Authority of India (TRAI) gave its response to the back-reference submitted by DoT, facilitating a decision on three vital issues:
- The validity period of the spectrum
- Postponing auction in the 27.5- 28.5 GHz band.
- The spectrum to be reserved for BSNL and MTNL.
The developments indicate that DCC could endorse 5G spectrum auctioning on Thursday or directly move for the cabinet’s nod next week. And if the DoT begins auctioning by June, we can expect a limited roll-out of 5G services by year-end. According to sources, Prime Minister Narendra Modi could highlight the 5G launch in his independence day speech on Aug 15.
The two 5G spectrum bandwidths
- The crucial bandwidth between 3300 – 3670 Mhz.
DoT has reserved 40 Mhz for state-run companies. Of the remaining, Airtel and Jio can buy a maximum of 130 Mhz, and the rest, 70 Mhz, is available for Vodaphone Idea (Vi). However, Vi has requested the regulator to allot 80 Mhz of contiguous spectrum in this band, as telecoms across the globe have predominantly launched 5G services with 100 Mhz of the spectrum.
- The Millimetre band between 24.25 GHz to 28.5 GHz
Standing by the position endorsed by Trai, the department of telecommunications doesn’t want to auction 27.5-28.5 GHz in this round. It is also due to satellite companies making their demand for this band wholly for themselves for their broadband foray and telcos contending it saying, it can impact their 5G business. So DoT has suggested keeping the auction of this band on hold.
Now the auction in the millimetre band will be for 2850 Mhz of the spectrum, in which DoT is already reserving 400 Mhz for state-owned telecom companies.
Airtel and Reliance Jio can buy a maximum of 1,140 Mhz each with a 40 percent cap for bidders in place. Here again, Vodafone Idea has 570 Mhz available in the pan-India 5G spectrum if it has the financial strength to buy.
Base price reduced
Earlier, Indian telcos had sought a reduction of 90 percent in the 3.5 GHz spectrum. However, DoT has suggested slashing the base price by 36 percent by shrinking the validity period from 30 years to 20 years. So now 1 MHz of pan-India spectrum would cost Rs.317 crores (from the before said base price of Rs.476 crores). Sources say that all three telecom giants would save Rs.4200 crores on the spectrum user charges annually.