Cabinet approves 5G spectrum auction, services to roll out soon

India's cabinet has approved a proposal to auction high speed fifth generation, or 5G, telecom spectrum for 20 years by the end of July, according to a statement.

Spectrum totaling 72 GHz will be auctioned across 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, the government said.

5G telecom services, expected to be rolled out soon, will have speed and capacities about 10 times higher than possible through the 4G services.

The cabinet has also green-flagged so-called private captive networks using which enterprises and technology giants can have their own networks to enable machine to machine communications, Internet of Things and artificial intelligence applications across automotive, healthcare, agriculture, energy, and other sectors.

India, which has among the lowest telecom costs in the world, has seen intense competition in the telecom space over the past several years, leading to consolidation.

Meanwhile, the government is looking to develop domestic 5G technology and has incentivized activity in the sector through production-linked incentives for manufacturing of mobile handsets, telecom equipment and semiconductors, which is expected to aid the 5G launch. Prime Minister Narendra Modi has said India will launch 6G services by the end of the decade.

At the upcoming 5G auction, the companies will benefit from the reforms announced in September, 2021, including the zero spectrum usage charges, lowering operating costs. Further, the requirement of submitting a financial bank guarantee equivalent to one annual instalment has also been done away with.

For the 5G airwaves, successful bidders will not have to pay upfront. Instead, payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year, the government said.

Moreover, the bidders can surrender the spectrum after 10 years with no future liabilities with respect to balance instalments, it added.

It was not immediately clear whether the cabinet has approved the department of telecom's recommendations on pricing of the spectrum.