Guwahati: The Union Cabinet has accepted a proposal from the Department of Telecommunications to hold a spectrum auction, in which spectrum would be allotted to successful bidders for the provision of 5G services to the public and corporations.

The Union Cabinet was presided over by the Prime Minister of India, Narendra Modi.

The digital connection has been a significant aspect of the government's policy efforts, such as Digital India, Start-up India, and Make in India.

Broadband, particularly mobile broadband, has become an essential element of residents' everyday lives. This has been greatly aided by the fast growth of 4G services across the country since 2015. Today, 80 crore people have access to broadband, up from 10 crore people in 2014. Spectrum is an essential component of the overall 5G ecosystem. The implementation of creative use-cases and technology has the ability to develop new-age businesses, produce additional money for firms, and give jobs.

A total of 72097.85 MHz of spectrum with a 20-year validity term will be auctioned off by the end of July 2022. The auction will be held for spectrum in the following frequency bands: Low (600 MHz, 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz), Mid (3300 MHz), and High (26 GHz). Telecom Service Providers are projected to use the Mid and High band spectrum to bring out 5G technology-based services capable of offering speeds and capacities that are about ten times greater than what is now feasible with 4G services.

The Telecom Sector Reforms announced in September 2021 will boost the spectrum auction. The reforms include zero Spectrum Usage Charges (SUC) on spectrum bought in the next auction, which will bring considerable relief to service providers in terms of telecom network operating costs. Furthermore, the obligation to present a financial bank guarantee equal to one yearly installment has been eliminated.

Keeping the pace of telecom sector changes going, the Cabinet approved a number of progressive alternatives for bidders to purchase spectrum in the next spectrum auction in order to facilitate ease of doing business. For the first time ever, successful bidders are not required to make an advance payment.

Spectrum payments can be made in 20 equal yearly installments paid in advance at the start of each year. This is projected to reduce cash flow requirements and slash the cost of doing business in this industry considerably. The bidders will have the option to surrender the spectrum after 10 years with no further commitments for balance payments.

The availability of an adequate backhaul spectrum is also required for the deployment of 5G services. To address backhaul demand, the Cabinet has agreed to provisionally allocate to telecom service providers two carriers of 250 MHz each in the E-band. In addition, the Cabinet resolved to more than double the number of classic microwave backhaul carriers in the existing frequency bands of 13, 15, 18, and 21 GHz.

The Cabinet also decided to allow the development and deployment of private captive networks in order to catalyze a new wave of innovations in Industry 4.0 applications such as machine-to-machine communications, the Internet of Things (IoT), and Artificial Intelligence (AI) in the automotive, healthcare, agriculture, energy, and other sectors.