A mega auction of 5G spectrum began today, on 26th July, with 72,000MHz of airwaves on offer. All the big names such as Reliance Jio, Bharti Airtel, Vodafone Idea, and Adani have submitted deposits to verify their participation. The Union Cabinet-approved auction will be the first major step towards the beginning of the 5G services in India. It will seek to give access to ultra high-speed and low-latency mobile internet.
The details of the auction are given as follows:
What spectrum is being auctioned?
With a validity of 20 years, 2097.85 Mhz of spectrum will be put on sale from 26th July. 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 believes that the Mid and High band spectrum will be used by telecom service providers to introduce 5G technology services which shall give out speed and capacities about 10 times higher than the current 4G services.
How will the auction take place?
The auction shall take place through a Simultaneous Multiple Rounds Ascending (SMRA) e-auction on the Internet. The format allows bidders to bid on various individual lots at the same time. The bidders are also needed to submit an earnest money deposit (EMD) before the auction begins. They will be given out eligibility points based on the EMD. These points will be utilized while placing bids during the auction. Adani has put in the lowest amount at Rs 100 crore, while Reliance Jio has put in the highest at Rs14,000 crore. Coming onto the other two bidders, Bharti Airtel, has deposited Rs 5,500 crore while Vodafone Idea, gave Rs 2,200 crore.
How expensive will the spectrum be?
The complete spectrum at the auction is estimated at more than Rs 5 lakh crore at the reserve price. A Reserve price can be termed as the lowest amount that a seller will grant as the winning bid. It can be called a base price of some kind.
To gather more intense bidding, the government no longer requires bidders to make upfront payments. Instead of that, payment can be made in 20 equal annual installments.
How were the prices decided by the government?
Telecom giants have avoided the 700 Mhz bandwidth for two successive sales, due to high prices. In lieu of that, the Telecom Regulatory Authority of India (TRAI) recommended a 40 % cut in the reserve price of 700 MHz, and a 36 % cut in the reserve price of 3300-3670 MHz band, well known as mid-band 5G.
TRAI`s suggestions were accepted by the Digital Communications Commission (DCC too increase the competition in the bidding.