5G auction: DCC clears Trai recommendations
The Digital Communication Commission (DCC) on Tuesday cleared the auction of 5G spectrum with a validity of 20 years, but decided not to auction part of the millimetre band between 27.5 GHZ to 28.5 GHZ for the time being.
Satellite operators had wanted that band for their exclusive broadband operations.
The Telecom Regulatory Authority of India (Trai) had recommended earlier that this band should also be auctioned and given for mixed use to telecom operators as well as satellite operators. However, in response to the back reference from the Department of Telecommunications (DOT), it left the matter to the latter to decide whether this frequency should be allocated or auctioned.
The DCC also accepted the principal of the regulator that the roll-out obligation has to be imposed on each band of spectrum, rather than what the DOT had suggested in its back reference, that it should be applied in a combined manner for both the 5G spectrum bands of 3300-3670 MHZ and 24.25-27-5 Ghz. However, it has reduced the roll-out obligation 10 per cent to 20 per cent.
The DCC has also stuck to its stand that private networks will not be permitted to get spectrum from the DOT to run their networks or lease spectrum from operators to run an independent network. The Trai had suggested a demand assessment of spectrum requirement of private networks and had disagreed with the Dot’s back reference that enterprises should not even be allowed to lease spectrum.
Sources in the DOT say a Cabinet note is expected to be prepared in a day or two, and it is expected to be taken up by the Cabinet next week. If all goes well, the DOT would be able to get its plan of launching the auction in June, and the first 5G services might be rolled out by the end of this year, says telcos.
Sources in the DOT said that there are multiple uses for the 27.5-28.5 Ghz frequency and this has to be studied by Trai. A final call will be taken based on the latter’s recommendation. “It’s a matter of a few months and this band will be taken up in next round of auction”
Telcos, which had clamoured for a 90 per cent reduction in the base price of the 3.5 Ghz spectrum, however, will have to live with a 36 per cent reduction in the price at ₹317 crore for a pan-india 1 Mhz of spectrum, compared with what Trai had recommended in 2019. However, the three operators will also save around ₹4,200 crore from spectrum user charges annually, which can be used for spectrum acquisition.
The DOT did an about turn in its back reference, suggesting 20 years validity, though in its term of reference it had asked for a base price with a validity of 30 years, which was part of its telecom survival package announced last year. However, Trai’s formula that the base price of 30 years should be calculated at 1.5 times the price of 20 years complicated matters. On this basis, the base price for nationwide spectrum in the 3.5 Ghz band would have been ₹476 crore — hardly any reduction from the ₹492 crore recommended by Trai in 2019.