• The Union Cabinet has approved the auction of airwaves capable of offering fifth generation, or 5G, telecom services, including ultra high-speed Internet, and gave its nod for setting up captive 5G networks by big tech firms.

• As much as 72 GHz of spectrum will be put on the block during the auction, set to commence on July 26, 2022.

• The 5G services are expected to be rolled out by August-September.

Importance of 5G technology

• 5G is the fifth generation of mobile communications technology. It will supplement the 2G, 3G and 4G mobile networks currently deployed in India and will add evolutionary and revolutionary services.

• Roughly every ten years, the next generation of mobile communications network is released, bringing faster speeds and increased capabilities. The first generation (1G) of wireless networks brought the very first cellphones. 2G brought improved coverage and texting. 3G introduced voice with data/Internet, and 4G long-term-evolution (LTE) delivered increased speeds to keep up with mobile data demand.

• 5G represents a complete transformation of telecommunication networks, introducing a wealth of benefits that will pave the way for new capabilities, and support connectivity for applications like smart cities, autonomous vehicles, and telemedicine.

• 5G will provide internet speed and capacity at least 10 times higher than 4G services.

• 5G will additionally also connect a myriad of new devices including machines, sensors, actuators, vehicles, robots and drones, to support a much larger range of applications and services. 

• 5G technology has the potential for ushering a major societal transformation in India by enabling a rapid expansion of the role of information technology across manufacturing, educational, health care, agricultural, financial and social sectors.

• The 5G testbed has been developed as a multi-institute collaborative project by eight institutes. The indigenous 5G test bed, a visionary technology development project initiated in telecom space, will enable development, testing and proliferation of 5G technology system components, cross-sectoral use cases, besides setting up the foundation for the development of “6G Technology landscape” in the country.

Highlights of the auction process:

• Cabinet has approved 5G auctions at reserve prices recommended by the sector regulator Telecom Regulatory Authority of India (TRAI). TRAI had recommended an about 39 per cent cut in floor price for the sale of 5G spectrum for mobile services, a rate that was earlier labelled ‘deeply disappointing’ by COAI as telcos were keen on 90 per cent lower prices.

• A total of 72,097.85 MHz of spectrum with a validity period of 20 years will be put to auction as India market gears up 5G services that will usher in ultra high speeds and spawn new-age services and business models.

• Overall, the payment terms have been eased for bidders in the upcoming auction.

• For the first time ever, there is no mandatory requirement to make upfront payment by the successful bidders. Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year, a relaxation that is expected to significantly ease cash flow requirements and lower the cost of doing business in this sector.

• The bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance instalments. No SUC (spectrum usage charges) will be charged for spectrum acquired in this auction.

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