Cabinet approves 5G spectrum auction with no price revisions,more favorable payment terms and a nod to private captive networks

The much awaited auction for 5G airwaves has been approved by the Union Cabinet, the auction is scheduled to begin on 26 July,  opening the way for the sale and commercial launch of the next-gen telecom services later this year.

The cabinet cleared the Department of Telecom's (DoT) proposal for a 20-year spectrum auction at its meeting on Tuesday. It also resolved to "allow the creation and deployment of private captive networks in order to catalyse a new generation of industry 4.0 applications."

“A total of 72097.85 MHz of spectrum with a validity period of 20 years will be put to auction to be held by the end of July, 2022. The auction will be held for spectrum in various 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 stated in a release on Wednesday. The auction's base price was not specified in the news release.

“The availability of adequate backhaul spectrum is also required for the deployment of 5G services. To satisfy the backhaul demand, the Cabinet has decided to allocate two carriers of 250 MHz each in E-band to the telecom service providers. 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,” the press release stated.

The auction of 5G airwaves was approved by the Digital Communications Commission last month. Whereas, mobile service providers fought for a 90% drop in the base price, it only suggested 36% acceptance of the Telecom Regulatory Authority of India's (TRAI) recommendation.

“Spectrum payments can be made in 20 equal annual installments payable in advance at the start of each year. This is expected to significantly ease cash flow requirements and lower the cost of doing business in this sector. The bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance installments,” according to the government release.