Union Budget 2022-23: Telecom firms spar over 5G auction quantum

Airtel wants only interference-free spectrum to be put up for auction

The much-awaited 5G auction announced by finance minister Nirmala Sitaraman in her Budget speech this year faces yet another hurdle. 

Telecom operators are once again sparring with each other over how much of the spectrum identified for 5G by the government should be up for bidding.

One one side there is Airtel, which has written to the Telecom Regulatory Authority of India (TRAI), asking for a substantial trimming of the amount of 5G spectrum which will be on offer in the 3.5 GHz band —  from 370 Mhz to only 240 Mhz —  on the grounds that only spectrum which is free from interference should be put on the block.

But telcos led by Reliance Jio say that the entire spectrum that has been identified should be auctioned. They argue that without a minimum of 100 MHz of spectrum in this band, which is the global norm, a 5G standalone network offering high-speed services as well low-latency offerings will not attract consumers.   

Airtel has told the TRAI that only spectrum between 3.43 GHz and 3.67 GHz (totalling 240 MHz) should be auctioned as it is free from all external interference, and also that spectrum between 3.3 GHz and 3.43 GHz should be put on hold until other users vacate it. The total 3.5 GHz band which has been identified for 5G is from 3.3 GHz to 3.67 GhZ (370 MHz).

Reliance Jio, though, has suggested that the entire C-band, including 3.3 GHz to 3.67 GHz should be put up for auction. Jio has also said that to achieve interference-free deployment of the spectrum, TRAI could go for a rank-based allocation (which is done for 900 MHz), wherein the first-rank bidder would be given his preferred slot in the band.

The telcos argue that based on global trends, most countries have been offering a minimum of 100 MHz to each player. With 370 MHz on offer, the spectrum available to each of the three private operators could be capped to 100 MHz, while 70 MHz would be reserved for BSNL.

But based on Airtel’s proposal, the average spectrum for each player would be capped much lower — at 60 MHz — which is not enough for running 5G services. That is because low spectrum would raise both the capital cost for laying the network and the running costs, making the service more expensive for customers.

Moreover, limited spectrum would not be able to support services like machine-to-machine communications, remote surgery and other low-latency offerings such as autonomous vehicles. This is especially worrisome for Reliance Jio, which plans to roll out the more advanced standalone 5G network (where even the core which controls the network is 5G, unlike the 4G core that will be offered by its competitors initially).  

The TRAI, which has been soliciting opinion from stakeholders on the auctions, is yet to present its final recommendation on the contentious issue to the Department of Telecommunications. 

Says a senior executive of a telecom company: “It seems some telcos don’t want competitors to buy up to 100 MHz of spectrum and want to limit them by reducing the availability. This is despite talks with defence and space who have been very accommodating in finding a solution.”  They argue that certain telcos, owing to their financial constraints, do not want to buy too much spectrum.  

Telecom gear makers say that questions on whether there is enough equipment and mobile devices available globally for running on the 3.3GHz to the 3.4 GHz band are no longer valid. “Yes, two years ago that was an issue but now telecom equipment and devices are available in plenty and there is no constraint,” says a senior executive of a telecom gear maker.            

But Airtel has also put forward a strong case. It says that spectrum usage in the 3.3 -3.4 GHz band by the defence and navy in coastal areas will cause interference in large areas, considering that India has a vast coastline. Hence, it argues that this spectrum should only be given when the spectrum is fully vacated by the forces, or that telcos limit it only for indoor usage.  

Airtel has also argued that in the 3.4 GHz to 3.425 GHz band, there will be interference from the earth stations of the Department of Space (DoS). The DoS has indicated that there has to be a buffer zone between their earth station and any installation by the telcos. Airtel says that even if the buffer zone is of 100 km, telecom service providers will not be able to offer services to over 70 million people in as many as 600 towns.