TRAI Releases Consultation Paper for 5G Spectrum Auction

Yesterday, the Telecom Regulatory Authority of India, or TRAI, released a consultation paper on the 5G spectrum auction. The regulator has taken into account DoT's request that the latter sent on 13th September.

TRAI Brings Consultation Paper for 5G Spectrum Auction

The consultation paper, titled, "Auction of Spectrum in frequency bands identified for IMT/5G", has replied to the DoT's questions. In total, the telecom department had sent TRAI 74 questions regarding multiple issues around the 5G spectrum auction. In all, TRAI has answered the following issues:

• The applicable reserve price, band plan, block size, the quantum of spectrum to be auctioned, and associated conditions for auction of spectrum in 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-3670 MHz, and 24.25-28.5 GHz bands for IMT/5G.
• Quantum of spectrum/band, if any, to be earmarked for private captive/isolated 5G networks, competitive/transparent method of allocation, and pricing, for meeting the spectrum requirements if captive 5G applications of industries for machine/plant automation purposes/M2M in premises.
• Associated conditions like upfront payments, applicable moratorium period after upfront payments, number of deferred payment installments, and other related modalities for auction of spectrum with validity for 30 years.
• For creating provisions for surrender of spectrum, conditions, and fee for such surrender of the spectrum.
• Any other recommendations deemed fit for the purpose of spectrum auction in these frequency bands, including the regulatory/technical requirements as enunciated in the relevant provisions of the latest ITU-R Radio Regulations.

While releasing the consultation letter, TRAI also invited written comments on the same from the industry stakeholders. The industry can send in its comments by 28th December 2021.

However, it seems like TRAI has not given any indication for spectrum prices changing.

What's Happening with the Spectrum Price, Then?

TRAI has reported in its consultation paper that the DoT has asked for prices in the 526-698 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300-
3670 MHz and 24.25 – 28.5 GHz bands for 5G. Also, two new bands will debut at the 5G spectrum auction; the 526-698 MHz and the mmWave bands.

Per the consultation paper, TRAI uses a variety of methods to decide on the spectrum prices. First, it looks at international spectrum pricing, and then, it looks at the technical efficiency factor. Basically, a technical efficiency factor defines how a particular spectrum band is better than a benchmark spectrum band. For instance, the regulator decided on the base price of the 700 MHz spectrum by setting the 1800 MHz band as the benchmark. Then, it compared the two bands for technical superiority and priced the former band accordingly.

As such, TRAI has acknowledged the importance of mmWave in India. In clause 2.39, TRAI said,

As per a report on “The Impacts of mmWave 5G in India” published byGSMA in October 2020, mmWave spectrum, in particular, will play a crucial role in enabling the high-speed and ultra-low-latency features required by many 5G applications. India will benefit significantly from mmWave-enabled 5G. Over the period 2025–2040, it has been estimated that mmWave-enabled 5G will deliver $150 billion in additional GDP for India.

Therefore,  TRAI has recommended DoT to set a "balanced intermediate reserve price", so that the government can monetize spectrum effectively. Also, TRAI said that the price should not be too high so that the TSPs can participate in the auction.