Decks cleared for 5G auction but will you enjoy the benefits anytime soon?

Ready to enjoy blazing-fast speeds with 5G? Looking forward to enjoying entertainment options, such as immersive video and wireless holograms, which were hard to come by in the past? Well, there is good news for you, at least depending upon which city you live in. We are one step closer in our tryst with new high-speed services.  

The decks have reportedly been cleared for the Department of Telecommunications, or DoT, to auction the 5G spectrum. In fact, India might see 5G services being showcased on 15th August.

The Telecom Regulatory Authority of India, or TRAI, has left it to the DoT to take a decision on three crucial issues.

The first is the validity period of spectrum assignment. The second is the deferment of auction in the 27.5 GHz-28.5 GHz band. And, the third is the quantum of spectrum that will be reserved for BSNL and MTNL. As a result, the whole process has become simple. Going ahead, the Digital Communications Commission, or DCC, will clear the 5G spectrum auction. 

Subsequently, it will have to be cleared in the Union Cabinet. Finally, the DoT could begin the auction process in June. On their part, the telcos have said that if everything goes well, limited 5G services roll out might be seen by the end of this year.  

Telcos had demanded a 90 per cent reduction in the 3.5 GHz spectrum base price, compared to the regulator's recommendation in 2019. But this demand has not been met. However, at 317 crore rupees for a pan-India 1 MHz of spectrum, the base price has been reduced by 36 per cent for a validity of 20 years.

While it had earlier wanted a 30-year-period validity, the DoT took an about turn and suggested a 20-year period. According to a recent Business Standard report the base price for a 30-year period would be 1.5 times the base price for 20 years. As a result, the base price would have been 476 crore rupees, which would be pretty close to the 491 crore rupees recommended by TRAI in 2019. And, the telcos had made it clear that the price being pegged so high would discourage them from taking part in the auctions.  

The 30-year period was one of the elements of the telecom package announced by the government. However, the Cabinet can still take a call on any further reductions.

On the issue of private captive networks, TRAI had earlier recommended that enterprises should be allowed to get spectrum directly from DoT to run their own networks in remote locations. However, it has now changed tack and both the DoT and the regulator are on the same page on this contentious issue. Now, TRAI has reportedly said that a demand assessment would be necessary for enterprises to get spectrum directly.  

Telcos, on their part, have highlighted that the bulk of the business in 5G would come from enterprises, which is a trend seen globally.

While the current auction might not prove to be a similarly negative inflection point, it is worth asking that under the present terms and conditions, will an appreciable number of Indians be able to take advantage of 5G services?