Reliance Jio, Bharti Airtel, and Vodafone Idea will compete for valuable 5G spectrum.
India will begin auctioning 5G airwaves on July 26 after the Union Cabinet approved the next round of spectrum sales on Wednesday. By the 8th of July, all interested parties must submit their final offers.
On a pan-India basis, the government has fixed the base price for 5G airwaves (3300-3600MHz band) at 317 crore, a 36 percent reduction from the 492 crore it held in 2018 when the spectrum was still unsold.
“The 5G auctions are now open for business.” This is likely one of the most eagerly anticipated spectrum auctions, with major benefits for the industry and consumers,” said Deloitte India partner and telecom sector leader Peeyush Vaish.
The government has also announced an auction of the millimetre Wave band, which will allow operators not only harness the true potential of 5G, but also manage costs wisely, he noted.
Reliance Jio, Bharti Airtel, and Vodafone Idea are among the top candidates for the airwaves, which are crucial for introducing the next generation of technology after 4G. According to ICRA, carriers are likely to spend between $1 trillion and $1 billion in the future auctions.
Bidders can apply by July 8 for 72097.85 MHz of spectrum that will be put up for sale, including 5G airwaves in the 3300-3600 MHz range, according to the notice inviting applications, the formal document that lays out the auction parameters and procedures.
Spectrum in the low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), mid (3300 MHz), and high (26 GHz) frequency bands will be auctioned.
“It is expected that telecom service providers will use the mid and high band spectrum to roll out 5G technology-based services capable of providing speeds and capacities that are about 10 times higher than what is currently possible with 4G services,” the government said in a statement on Wednesday.
The payment terms for the 2022 auctions have been relaxed in some crucial areas. Spectrum purchased in the auction will be allotted for a period of 20 years, with payments made in 20 equal annual instalments.
The requirement that successful bidders make an upfront payment and submit a financial bank guarantee equivalent to one annual instalment has been removed. Telcos will also have the option of paying in advance.
After ten years, the bidders would have the option to surrender the spectrum with no more obligations for balance instalments.
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