5G spectrum auction is all set to start from July 26, yes you heard it right, as Union Cabinet has approved the proposal of the Department of Telecommunication to start or to conduct the auction of 5G spectrum 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.
“The beginning of a new era for Indian Telecom. 5G spectrum auction announced,” Minister of Communications, Ashwini Vaishnaw said at the occasion.
Eligibility Criteria For 5G Spectrum Bidders
According to the eligibility criteria, the Department of Telecommunication said the bidders have a net worth of Rs. 100 crores as License Service Area. On the other hand, the Government said that the net worth of Jammu and Kashmir and North East is set to Rs. 50 crores.
The ministry said that there is a lock-in period of one year from the submission of the application. It is worth noting that this is only applicable to new players and not applicable to the existing players like Reliance Jio, Airtel, and Vodafone-Idea.
5G Spectrum Pricing: Details
As per the DoT statement, a total of 72097.85 MHz of spectrum will be auctioned for 20 years. The 72097.85 MHz of spectrum will include low, mid, and high-frequency bands. It will have 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 3300 MHz, and 26 GHz.
The ministry said that the mid and high spectrum band will be used by telecom operators to roll out 5G technology services for providing speed, which is expected to be 10 times better or higher than 4G services.
However, analysts at JPMorgan in a note on Indian telecoms said that “We don’t expect a bidding war as 330Mhz of the mid band spectrum of 3300MHz is available in every circle and an operator requires only 100Mhz for pan India roll out. We estimate annual cash outflow for telcos of ₹28.4 bn if they choose the equal annual payment option over 20 years.”
For the unaware, the telecom regulator reduced prices 5G spectrum prices by 39 percent. The base price of the 2.3-3.7GHz (C-band) has been set at Rs. 317 crores, whereas the 700Mhz spectrum is set as Rs. 3,297 crores. In addition, the company included zero Spectrum Usage Charges (SuC) on the spectrum, which has been acquired in the auctions.
