What are spectrum auctions?

News: Department of Telecommunications (DoT) said on Wednesday (January 6) that auctions for 4G spectrum in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands will begin from March 1. Licence holders have until February 5 to submit their applications.

Facts:

What are Spectrum Auctions?

• Devices such as cellphones and wireline telephones require signals to connect from one end to another. These signals are carried on airwaves, which must be sent at designated frequencies to avoid any kind of interference.
• The Union government owns all the publicly available assets within the geographical boundaries of the country which also include airwaves. With the expansion in the number of cellphone, wireline telephone and internet users, the need to provide more space for the signals arises from time to time.
• To sell these assets to companies willing to set up the required infrastructure to transport these waves from one end to another, the central government through the DoT auctions these airwaves from time to time.
• These airwaves are called spectrum which is subdivided into bands which have varying frequencies. All these airwaves are sold for a certain period of time, after which their validity lapses, which is generally set at 20 years.

Why is spectrum being auctioned now?

• The last spectrum auctions were held in 2016.During that time, the government managed to sell only 40% of the spectrum that was put up for sale.
• However, the need for a new spectrum auction has arisen because the validity of the airwaves bought by companies is set to expire in 2021.

Who is likely to bid for the spectrum?

• All three private telecom players, Reliance Jio Infocomm, Bharti Airtel, and Vi are eligible contenders to buy additional spectrum to support the number of users on their network.
• Apart from these, new companies including foreign companies are also eligible to bid for the airwaves. Foreign companies, however, will have to either set up a branch in India and register as an Indian company or tie up with an Indian company to be able to retain the airwaves after winning them.

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