Spectrum Auctions

Why in the News?

Recently, the Union Cabinet chaired by Prime Minister approves the auctions of 5G spectrum bands.

• This follows the Budget 2022 announcement, that the government would auction telecom spectrum in 2022, which will enable private players to roll out 5G services before March 2023

Key Points: 

• The auction of over 72 GHz of the spectrum will be held by July end

• 5G spectrum in nine frequency bands will be auctioned to telecom operators such as Bharti Airtel and Reliance Jio

  • Nine frequency bands are Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz) and High (26 GHz) frequency bands

• A total of 72,097.85 MHz (or 72 Ghz) of spectrum with a validity period of 20 years will be put on sale during the auction

What are Spectrum Auctions?

• Devices such as cellphones and wireline telephones require signals to connect from one end to another

• These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference

• The Union government owns all the publicly available assets within the geographical boundaries of the country, which also include airwaves

• The central government through the Department of Telecommunications (DoT) auctions these airwaves from time to time

• These airwaves are called spectrum, which is subdivided into bands which have varying frequencies

• All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years

When will the commercial roll-out happen?

• The 5G deployment is likely to start from August-September this year, and service should commence in about 20-25 cities by the year-end

• However, given the nascent 5G ecosystem and evolving use cases, 5G rollouts would likely be granular starting with metros and larger cities

key Issues

• The industry has highlighted the two issues with regard to the upcoming auctions- 

  • High reserve prices for the spectrum:  The TRAI had earlier recommended reducing prices of airwaves across various bands by 35-40% from its earlier proposed base price, the telecom operators had expressed disappointment given their demand for a 90% cut in the prices

  • Direct allotment of spectrum to enterprises for setting up captive private networks: The Cellular Operators Association of India (COAI) has expressed that this provision will severely degrade the business case of Telecom Service Providers (TSPs)

What are captive private networks and why do they need spectrum bands?

• Private wireless networks are cellular networks built specifically for individual enterprises

• These networks are often deployed at a single unit, for example, a factory

• They can also be used in a wide-area setting, for instance, to monitor a mine in real-tim. 

  • Airports and ports can also have their own private 5G cellular network to process imaging data coming from surveillance cameras to manage the facility

• The key reason for its high-scale adoption is the need for greater data privacy and security

• Unlike unlicensed Wi-Fi service available in several private places, licensed spectrum bands offer greater data privacy, security and faster connection speeds

About 5G Technology:

• 5G is the next-generation cellular technology that will provide faster and more reliable communication with ultra-low latency

• The 5G data speeds are expected to be in the range of 2-20 Gigabit per second (Gbps)

• It shapes the Fourth Industrial Revolution,  or Industrial 4.0, quality of service delivery, innovation, etc. by facilitating smarter and developing societies

• 5G mainly works in 3 bands, namely:

  •  Low: The Low Band Spectrum has the maximum speed limited to 100 Mbps (Megabits per second)

  •  Mid: It offers higher speeds compared to the low band, but has limitations in terms of coverage area and penetration of signals

  •  High: It offers the highest speed of all the three bands, but has extremely limited coverage and signal penetration strength

The technology that 5G uses will improve data transfer speed at unexpected higher levels — almost 100 times more — and reduce latency times helping mission-critical services. Thus, 5G is essential but India needs to look if it is ready for the deployment of the technology.

Benefits of 5G:

• Faster Speed: There is great potential for India to move to an advanced digital revolution. With 5G technology, consumers will be able to download data-heavy content with better graphics in just a few seconds

• Low Latency: 5G has low latency when compared to 4G that will support new applications such as AI, IoT, and virtual reality efficiently

  • Latency is a measure of delay. In a network, latency measures the time it takes for some data to get to its destination across the network

• 5G is expected to form the backbone of emerging technologies such as the Internet of Things (IoT) and machine to machine communications

• Also, it would be supporting a much larger range of applications and services, including driverless vehicles, tele-surgery and real time data analytics

• 5G technology would also bring positive changes in the governance of the country, ease of living and ease of doing business

  • This would boost growth in every sector like agriculture, health, education, infrastructure and logistics