The next level – 5G will open up opportunities for businesses

News: Recently, Cabinet has approved the much-awaited airwave auction for ultra-fast mobile internet networks. With this, India is set to join the league of 5G-enabled nations.

What is 5G technology?

What are the benefits of 5G technology?

What is a Spectrum Auction?

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About the 5G auctions

The 5G spectrum auction is billed as the biggest, and the upcoming sale of airwaves across nine bands including 5G frequencies for 20 years. The auction could fetch more than Rs 4 trillion at the base price. TRAI in its April 2022 recommendation reduced the spectrum reserve price by more than 35% from its 2018 level, the demand from telcos was a cut by around 90%.

The spectrum usage charges earlier levied at about 3% of the telco’s adjusted gross revenue, have been abolished for spectrum allocated under fresh auctions.

The Cabinet decision on pricing is in sync with what the Telecom Regulatory Authority of India (TRAI) recommended in April during a review of its earlier proposal and has also been endorsed by the Digital Communications Commission.

What are the things that should be considered during 5G auctions?

Spectrum pricing: India is already late in its 5G journey, hence the telecom industry must not lose time in complaining about issues such as enterprises getting a better deal than telcos or high reserve prices for spectrum. Most other countries have conducted the 5G spectrum sale at a much lower rate.

The decision of captive private networks: The government has allowed enterprises to run captive private networks with the direct allocation of spectrum by the Department of Telecommunications. Enterprises have also been allowed to lease spectrum from telcos for their network.

But the telcos are opposing these decisions as they lose their revenues. According to their estimates, 40% of 5G revenues accrue from the enterprise services. This makes up for the bulk of the 5G revenues.

Taking the global benchmark, most other countries are following a similar model of direct allocation of spectrum to enterprises. Every telecom service provider has to look at the enterprise opportunity, either on its own or in collaboration. The gains for the economy by allowing business enterprises to embrace 5G would be huge.

Source: This post is based on the following articles

“The next level – 5G will open up opportunities for businesses” published in Business Standard on 16th June 22.

“Government has eased terms of spectrum auction, but high reserve price and allocations for enterprises will pose problems” published in Indian Express on 17th June 22.