5G Spectrum Auction to be Delayed till Q1 of 2022

Amid the second wave of COVID-19, India’s 5G spectrum auction is looking likely to be delayed to the first quarter of 2022.

5G Delayed Further by COVID and Indecision

Department of Telecommunications is currently busy ensuring network stability during the devastating second wave of COVID-19. Also, the DoT and TRAI are yet to make critical decisions on spectrum availability and pricing. Both of those factors combine to delay the spectrum auctions further.

However, there is actually no need for 5G spectrum auctions to happen right now. 5G trials started on Tuesday, and that will take time - at least 6 months of it. What's more, government can extend the trials, which will push the auction further. This depends on how companies perform during the trials - if the government sees the need to do so, it will.

Also, the telcos asking for an extension is not a remote possibility either. Especially given that India has its own 5G standard, 5Gi, that might take more time to adopt and implement.

DoT allocated some spectrum bands from the 700MHz spectrum band to the telcos to run the tests. This is different from 3G and 4G, where telcos had to try the tech after buying the spectrum.

Industry executives believe that the 5G spectrum auction will take place in the first quarter of 2022. That would allow the government to earn further spectrum revenue within this fiscal. In March, the government earned almost Rs. 78,000 crore from a 4G spectrum sale. The government received Rs. 22,000 in upfront payment back then, too.

What do the Telcos Want from the 5G Spectrum Auction?

That said, there are important operational issues that need sorting out. First, DoT should ask TRAI to reconsider the price of 700 MHz spectrum band, which is useful in both 4G and 5G, and hasn't been sold for the last 5 years.

There is also the case of adding mmWave to the catalog at the 5G spectrum auction. Till now, TRAI has only earmarked spectrum in 3.3-3.6 GHz bands for telecommunication purposes. TRAI also has prices 5G spectrum at Rs 492 crore per unit, which is too high as per the telcos.

Without the mmWave spectrum, which cover 26 GHz and 28 GHz bands, 5G deployment will get very expensive, and will place it out of the reach of people.

DoT needs to offer these bands, and if it does, it will have to seek pricing from TRAI, which will again take time as it goes through a consultation process. With that, DoT also has the existing 5G spectrum prices to worry about.

Then there are E and V bands. The E band is between 71-76 GHz and the V band in between 57-64 GHz, and are ideal for high-speed 5G. These bands can provide speeds of around 1 Gbps. The telcos want these bands at the auction. However, tech companies are asking for an administrative allocation. That is because the bands are supposed to be for backhaul and not access. Backhaul bands connect the core of a mobile network to nodes and then onto towers to transmit data.

Does 5G Even Make Sense Right Now?

India's Big Telco is ready to go 5G within a few months of getting the required bands. However, there are a couple of factors to be considered. First, the use cases are so few within the country. And second, the 5G mobile phone ecosystem is relatively new and scarce. Around 300 million Indians still use feature phones and a similar number is transiting to 4G.

Therefore, this delay can well and truly be a blessing in disguise, as it gives time to the 5G ecosystem to develop. When the time comes, that will ensure enough use cases to make it a money-making venture for telcos to go 5G.