India today announced the commencement of spectrum auction with basic value of Rs 96,238.45 crore for selling frequency bands to bolster 5G network.
This spectrum auction involves a total quantum of 10,522.35 MHz of spectrum across various bands, according to the Ministry of Communications.
The first spectrum auction in 2024 under the new telecom minister Jyotiraditya Scindia is expected to receive overwhelming response from top telecom operators, according to industry experts.
5G spectrum auction is happening at a time when several 5G smartphone customers are unhappy about the 5G performance from their operators. Several data customers are not receiving enough 5G speed and 5G network coverage in several locations despite purchasing 5G smartphones.
“To augment existing telecom services and maintain continuity of services, the government will hold the spectrum auction on Tuesday,” stated the Ministry of Communications.
5G spectrum
“COAI eagerly anticipates the successful completion of 5G spectrum auctions. The 5G auctions will catalyze the rapid rollout of 5G services across the country, leading to enhanced coverage and vastly improved connectivity. Moreover, the successful deployment of 5G will be a major stride towards achieving digital inclusion,” SP Kochhar, Director General of COAI, said.
Global telecom industry association GSMA says there is a need for long-term spectrum roadmap and availability of adequate spectrum in crucial high, and mid-band ranges at sustainable terms and conditions for Indian telecom operators.
The spectrum bands available for bidding include 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz. The auction began at 10 a.m. and features participation from three major telecom players: Bharti Airtel, Vodafone Idea, and Reliance Jio Infocomm.
The 1800 MHz spectrum band, valued at Rs 21,752.4 crore at reserve price, is one of the most significant allocations, followed closely by the 800 MHz band at Rs 21,341.25 crore.
The Department of Telecommunications (DoT) initiated the spectrum auction process on March 8. The spectrum will be assigned for a period of 20 years, with successful bidders allowed to make payments in 20 equal annual installments, ensuring the Net Present Value (NPV) is protected at an interest rate of 8.65 percent.
Additionally, spectrum acquired through this auction can be surrendered after a minimum period of 10 years. Notably, there will be no Spectrum Usage Charges (SUC) for spectrum acquired in this auction, as stated by the ministry.
“By bridging the digital divide, the 5G spectrum auctions will ensure that even the most remote areas of our country gain access to high-speed internet, thereby fostering greater economic opportunities and social advancement. The auctions also symbolize our commitment to Viksit Bharat and we are confident that the outcomes of these auctions will lay a strong foundation for a prosperous and digitally empowered India, COAI’s SP Kochhar said.
Baburajan Kizhakedath
