A mega auction of mobile spectrum began on Tuesday, 26 July, with 72,000MHz of airwaves on offer. Reliance Jio, Bharti Airtel, Vodafone Idea, and Adani all submitted deposits to confirm their participation.
The first day of the 5G auction saw bids of Rs 1.45 lakh crore from the four contenders, Communications Minister Ashwini Vaishnaw said.
This auction, approved by the Union Cabinet in June, is the first concrete step towards rolling out 5G services in India, giving access to ultra high-speed and low latency mobile internet.
Here's all you need to know about the auction.
What spectrum is being auctioned?
72 GHz of spectrum will be put on sale from 26 July, with a validity of 20 years. The frequency bands on sale are, 600 MHz, 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz, 3,300 MHz and 26 GHz.
The government expects the Mid and High band spectrum to be utilised by telecom service providers to roll out "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."
How will the auction happen?
This will be a Simultaneous Multiple Rounds Ascending (SMRA) e-auction, conducted over the Internet. This format lets bidders bid on multiple individual lots at the same time.
Bidders are required to submit an earnest money deposit (EMD) before the auction, on the basis of which they will be allocated eligibility points. These points will be used while placing bids during the auction.
Reliance Jio has put in Rs 14,000 crore, while Adani has put in only Rs 100 crore, the lowest of all four. Bharti Airtel deposited Rs 5,500 crore, while Vodafone Idea gave Rs 2,200 crore.
How expensive will the spectrum be?
The entire spectrum on offer at the auction is valued at more than Rs 5 lakh crore at reserve price. Reserve price refers to the lowest amount that a seller will accept as the winning bid – a base price of sorts.
To invite aggressive bidding, the government has done away with the requirement for successful bidders to make upfront payments. Instead, payments can be made in 20 equal annual installments.
Spectrum usage charges are gone, and bidders will also be able to surrender their spectrum after just 10 years without owing the government any remaining installments.
How did the government decide the prices?
In April, the Telecom Regulatory Authority of India (TRAI) recommended a 40 percent cut in the reserve price of 700MHz band and a 36 percent cut in the reserve price of 3300-3670 MHz band, popularly known as mid-band 5G.
The Digital Communications Commission (DCC) accepted TRAI's suggestions last month in hopes to attract aggressive bidding from telecom giants Jio, Airtel and Vodafone Idea.
Telcos have expressed concern about the 5G prices proposed in 2018 and have avoided the 700 MHz bandwidth for two successive sales, due to high prices.
What are captive non-public networks?
The government has also paved the way for Big Tech companies like TCS, Cisco, Google, and Ericsson to enter the 5G arena through captive networks, which will not be accessible to the general public.
These companies can directly acquire spectrum from the government to build and test industry 4.0 (technology focused) applications such as machine-to-machine communication, Internet of Things, artificial intelligence.
"In this regard, DoT will undertake demand studies and thereafter seek Trai recommendations for direct assignment of spectrum to such enterprises,” the notice-inviting applications (NIAs) for spectrum auctions said.
What has the government said about backhaul carriers?
The government has finally decided to increase the number of microwave backhaul carriers in the frequency bands of 13, 15, 18 and 21 GHz.
The backhaul portion of a network refers to the links between the core network, or backbone network, and the small subnetworks at the edge of the network. Mobile-backhaul connects a cell site to the core network.
It is essential for the smooth functioning of 5G networks.