DoT may not extend 90-day period for telecom firms to test 5G spectrum

Telecom firms to shell out a minimum of Rs 9,840 crore on pan-Indian basis
The Department of Telecommunications (DoT) has expressed reservations over increasing the duration for allocating 5G spectrum for trials, as companies in the past sat on lowly priced airwaves, which otherwise would have fetched the central government a premium.

The department feels that the airwaves for running 5G trials can only be allocated for 90 days, whereas the telecom companies feel it is “too” less a time and the same airwaves should be available to them for at least one year. “The allocation of the airwaves should be for one year and it should be reviewed every three months, in order to ensure that the companies pay the fees periodically and do not squat on the spectrum,” a source privy to the development told Business Standard.

A stakeholders’ panel on Monday suggested that the Department of Telecommunications extend the duration of 5G spectrum trials, as they felt that the current duration of 90 days was too short for such field trials.

According to sources, the DoT is unhappy with the proposal because some players, who were allocated spectrum for testing purposes, did little. The sources, however, declined to reveal the names of the companies, which bagged the spectrum through such means.

Swedish telecom company Ericsson launched its hardware and software products under its wireless product portfolio or radio system portfolio for the Indian market in November last year and said the addition will allow Indian telecom companies to roll out 5G networks faster, once they are ready.

Global handset makers see India as a great opportunity for penetration of 5G technology. Finnish telecom gear maker Nokia views India as a huge underserved market opportunity to drive the 5G adoption in the country.

The Union government expects to complete the 5G spectrum auction by August 2019 and the services will be rolled out by 2020.

The Telecom Regulatory Authority of India (Trai) had suggested pan-Indian base price of Rs 492 crore per mega hertz for 5G radiowaves.

Trai recommended that the proposed base price of the 5G spectrum in 3,300-3,600 MHz band should be equal to 30 per cent of the reserve price of 1,800 MHz band at Rs 492 crore per MHz on pan-Indian basis.

There are 11 bands for 5G spectrum services, of which four bands — premium 700 MHz band, 3.5 GHz, 24 GHz and 28 GHz band — can be made immediately available for the service.

Telecom operators bidding in the next round of auctions for the spectrum to provide 5G services will have to shell out a minimum of Rs 9,840 crore on pan-Indian basis to buy spectrum in 3,300-3,600 MHz band as Trai suggested that it should be put to auction in the block size of 20 MHz.

The base price for the 700 MHz premium bands is twice the reserve price of 1800 MHz spectrum band or Rs 6,568 crore per Mhz.

In 2016, the government had fixed the base price of 700 MHz band at Rs 11,485 crore per Mhz, which was around four times the price of 1,800 MHz band. Operators were required to buy radiowaves worth Rs 57,425 crore to provide mobile service in this band. 

THE STORY SO FAR
  • Trai comes out with recommendations for 5G spectrum auctions in Aug ‘18. Suggests pan-Indian base price of Rs 492 crore per megahertz for 5G airwaves  
  • Telecom firms to shell out a minimum of Rs 9,840 crore on pan-Indian basis to buy spectrum in 3,300-3,600 Mhz band, according to the recommendations 
  • The base price for the 700 MHz premium bans is twice the reserve price of 1,800 MHz spectrum band, or Rs 6,568 crore per Mhz 
  • The Union government expects to complete the process for 5G spectrum auction by August 2019 and services will be rolled out by 2020