Union Cabinet Approves 5G Spectrum Auction For 20 Years, Allows Private Captive Networks

The Cabinet has approved Department of Telecom's proposal for the auction of 72 GHz of spectrum for a 20-year-period by July end to reduce the cost of doing business for Telecom Service Providers

The successful bidders will not have to pay upfront for the 5G airwaves, the government said.

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The Union Cabinet has approved a proposal to auction high speed fifth generation (5G) telecom spectrum for 20 years by the end of July, according to a statement.

In a meeting, the Cabinet has approved Department of Telecom's (DoT’s) proposal for the auction of 72 GHz of spectrum for a 20-year-period by July end to reduce the cost of doing business for Telecom Service Providers and also decided to “enable the development and setting up of private captive networks to spur a new wave of innovations in industry 4.0 applications”.

Telecom Minister Ashwini Vaishnaw on Wednesday tweeted about announcement on 5G spectrun auction in India. 

Moving forward with PM @narendramodi ji’s vision of a Digital India.
Spectrum auction announced today is an integral part of developing #BharatKa5G ecosystem. pic.twitter.com/k5JWCyAyWo

— Ashwini Vaishnaw (@AshwiniVaishnaw) June 15, 2022

In a press release, the Centre on Wednesday said, “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.”

However, there was no mention on the base price for 5G auction.

The Digital Communications Commission approved the auction of 5G airwaves last month. While mobile service providers had lobbied for 90 per cent reduction in the base price, it only recommended 36 per cent accepting the suggestion of the Telecom Regulatory Authority of India (Trai).

The successful bidders will not have to pay upfront for the 5G airwaves. The payments can be made in 20 equal annual instalments to be paid in advance at the beginning of each year, the government said.

“Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning 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 instalments,” the government note said, while adding, “The availability of sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To meet the backhaul demand, the Cabinet has decided to provisionally allot 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,” it said.