Confident that telecom players will make 5G auction a success: Vaishnaw

On captive private networks, the minister said the government has gone with the TRAI recommendations which were done in consultations with the industry

As the countdown to the 5G era begins, Communications Minister Ashwini Vaishnaw on Friday exuded confidence that telecom players will participate with enthusiasm in the upcoming spectrum auction and make it a success.

Vaishnaw told PTI that this is the right time for the country to move forward on 5G, adding that Indian telcos are keen on starting this new journey.

"I am confident that telecom players will participate with enthusiasm in 5G auction and make it a success," the minister said.

With TRAI substantially reducing the base price of spectrum and given the decision on spectrum usage charges (SUC), the "overall financial burden on the telcos will be less, going forward", he noted.

 

No SUC will be charged for spectrum acquired in this auction. According to industry estimates, this could offer players a relief of nearly 20-25 per cent on spectrum costs, over and above the 40 per cent price reduction that TRAI mooted.

On the matter of captive private networks, the minister said the government has gone with the TRAI recommendations which were done in consultations with the industry.

"This is the right time for the country to move forward on 5G journey. Simultaneously, we have developed our own 4G stack. Globally there is a lot of interest in it, and people are very excited that a trusted source has got developed," the minister said, adding that the next milestone will be around 5G.

"My discussions show that telcos are quite keen on starting this new journey," Vaishnaw said, observing that 5G will usher in many new use cases.

The telecom department is all set to hold the auction-related pre-bid conference on Monday (June 20), in the run up to mega auctions scheduled next month.

On the block will be Rs 4.3 lakh crore worth of airwaves capable of offering fifth-generation or 5G telecom services, including ultra-high-speed internet. 5G services will usher in ultra-high speeds -- about 10 times faster than 4G -- and spawn new-age services and business models.

The government has also given its nod for setting up of captive 5G networks by big tech firms.

The auction -- entailing 72 GHz of spectrum -- is set to commence on July 26, 2022.

The auction will be held for spectrum in various low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz) and high (26 GHz) frequency bands.

The Cabinet approved 5G auctions at reserve prices recommended by the sector regulator Telecom Regulatory Authority of India (TRAI). TRAI had recommended an about 40 per cent cut in floor price for the sale of 5G spectrum for mobile services, a rate that was earlier labelled 'deeply disappointing' by COAI as telcos were keen on 90 per cent lower prices.

Some analysts are of the view that the spectrum auction is unlikely to see a bidding war and telecom companies may choose to be selective on the quantum, in the backdrop of likely demand supply imbalance and annual auctions.

While the 5G spectrum in nine frequency bands will be auctioned to telecom operators like Bharti Airtel and Reliance Jio, the Notice Inviting Applications (NIA) -- bid-related document issued by DoT -- said big tech firms for the time being will be allowed to take the 5G spectrum for their captive non-public network, on lease from the telecom companies.

The NIA said direct allocation to the big tech companies will follow a demand study and sector regulator TRAI's recommendation on aspects such as pricing and modalities of such allocation.

The decision on private networks came as a disappointment to telcos, which had been arguing that if independent entities are allowed to set up private captive networks with direct 5G spectrum allotment by the telecom department, the business case of TSPs (Telecom Service Providers) will get severely degraded.

Notably, Cellular Operators' Association of India (COAI) -- which counts Reliance Jio, Bharti Airtel and Vodafone Idea as its members -- has not issued a statement after the decision on spectrum auction was announced.