India confirms July 5G auction plans – but is everyone ready?

India confirms July 5G auction plans – but is everyone ready?

India’s long-promised 5G auctions will begin on 26 July. This was announced on Wednesday by the Department of Telecommunications (DoT) in a notice of inviting applications (NIA).

Submissions have to be in by 8 July. The final list of bidders will go live on 20 July. Mock auctions will take place a few days before the real thing, though it’s not clear what that will involve. Once sold, the airwaves will be owned by spectrum winners for 20 years.

More importantly perhaps, the DoT has given until 22 June for any would-be participants to seek clarifications on the NIA. 

Given that the 5G reserve price has not changed, it will be interesting to see how operators respond. Regulator TRAI recently cut the prices on an overall basis by 39% compared to 2018, but this is way short of the 90% cut operators wanted.

According to TeleGeography's Comms Update, operators are also worried that some spectrum could be allocated directly – that is, without an auction process – to businesses for private networks. The DoT clarifications will be made public on 30 June.

There have been some concessions, however. There will be no spectrum usage charges on spectrum acquired in the upcoming auction and, as we reported in October, no requirement for a bank guarantee equivalent to one annual instalment. Nor will an upfront payment be required from successful bidders; payment will be in up to 20 annual instalments.

The government will auction a total of 72097.85MHz of spectrum in various bands including 600MHz, 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 3300MHz and 26GHz frequency bands. TRAI has recommended reserve prices in the region of US$63.974 billion.

Whatever the concessions, ratings firm ICRA, quoted in India’s Economic Times, expects a significant increase in the industry’s overall debt as a result of the auctions. Whether 5G and other growth areas like enterprise business, cloud services, digital services and fixed broadband services will ease that burden is now the question.

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