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India announces its 5G spectrum auction

Money bag with indian rupee symbol

The Indian government has committed to auctioning spectrum licenses it expects to be used for 5G, by the end of July.

A total of 72097.85 MHz of spectrum with a validity period of 20 years will be offered up, covering the 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 3300 MHz and 26 GHz bands. Documents detailing how that massive chunk of spectrum is allocated between the bands have been published but the fragmented nature of the Indian telecoms market make it very difficult to calculate totals for each. If you fancy the challenge, click here.

A lot of the announcement consists of standard generic explanation of how important telecoms are, followed by the Indian government congratulating itself for making the spectrum available and for extorting a bit less money from operators than it has previously. ‘Spectrum is an integral and necessary part of the entire 5G eco-system,’ apparently.

“It is expected that the mid and high band spectrum will be utilised by telecom service providers to roll-out of 5G technology-based services capable of providing speed and capacities which would be about 10 times higher than what is possible through the current 4G services,” says the announcement. That only covers the 3300 MHz and 26 GHz bands, according to the stated categorisation, and no further mention is made of the rest.

Instead the announcement makes a point of stressing the relatively benign financial strings attached to this auction, when compared to previous ones. Presumably in response to the near bankrupting of one of the only three national operators left standing, some structural reforms were announced last September, which include the removal of something called the Spectrum Usage Charge. Even so, it’s hard to see how Vodafone can hope to match the bidding power of Bharti and Jio in this auction.

On top of that it will have to compete with new players looking for spectrum to use in private networks. “The Cabinet 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 such as machine to machine communications, Internet of Things (IoT), Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors,” concludes the announcement.

The big operators have been grumbling about this in advance, with one concern being that private network players will enjoy less burdensome terms. Reuters reports that an unspecified proportion of the spectrum will be set aside especially for this purpose, which it seems fair to assume from the government announcement will be in the more useful lower frequency bands.

All this top-down tinkering is probably done to try to balance the needs of various stakeholders while, as is usually the case with spectrum actions, trying to maximise the wealth transfer from private to public. Given the still debatable utility of 5G, the much more humble needs of much of the Indian population and the government-imposed financial stress the sector is already under, we wouldn’t be surprised if the money spent on this auction fall well short of expectations.

 

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