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5G spectrum auction FAQ: What is it and what does it mean for Jio, Airtel, Vi?

5G spectrum auction FAQ: What is it and what does it mean for Jio, Airtel, Vi? Image
  • Posted on 26th Jul, 2022 19:37 PM
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5G spectrum auction FAQ: What is it and what does it mean for Jio, Airtel, Vi? India has finally begun the long-awaited 5G spectrum auction with 72GHz of airwaves up for grabs. Participating in the auction are India’s all major telecom companies — Bharti Airtel, Reliance Jio, and Vi (Vodafone Idea)

India has finally begun the long-awaited 5G spectrum auction with 72GHz of airwaves up for grabs. Participating in the auction are India’s all major telecom companies — Bharti Airtel, Reliance Jio, and Vi (Vodafone Idea) — and newcomer Adani Data Networks, who will bid for airwaves across 10 bands worth the base price of Rs 4.3 lakh crore. The auction is likely to last until 6 pm today or as long as the total number of airwaves are not sold, after which we will finally know who will offer what as India prepares for the 5G rollout in the latter half of 2022. Also Read - Redmi K50i launch in India today: What to expect

Reliance Jio, being one of the carriers to have conducted 5G trials across India, will likely be the most aggressive bidder, followed by Airtel, which also did trials aplenty. The earnest money deposits (EMDs) made by each firm determine the intent of the bidder and what their target is. Jio, for instance, deposited an EMD of Rs 14,000 crore, while Airtel submitted Rs 5,500 crore. Vi put in Rs 2,200 crore, followed by Adani Group’s Rs 100 crore. The EMDs also indicate the spectrum each bidder plans to buy, thereby, suggesting the kind of services they will offer. Also Read - Jio adds 3.1 million subscribers, Vi continues to lose: TRAI

What is EMD?

EMD, or the earnest money deposit, is also known as the pre-bid amount that a participant has to pay as one of the prerequisites to become an eligible bidder in an auction. This amount indicates the buying capacity, as well as the intent, of the participant as and when they qualify as a bidder. This is typically 5-10 percent of the reserve price (base price) of the entity up for auction. Also Read - Jio is giving a new SIM, 100GB of data free on purchasing HP laptop: Check details

The Telecom Regulatory Authority of India (TRAI) gives each applicant eligibility points according to their EMDs. These points determine the applicant’s ability to target a particular amount of radio waves in a spectrum band. Reliance Jio has the highest EMD, while Adani Data Networks has the lowest. This tells that Jio will be aggressively bidding for the premium spectrum bands, while Adani will likely not. Airtel and Vi’s EMDs are also less than that of Jio, which means their 5G services could be somewhat inferior to Jio’s.

What spectrum bands are up for auction?

The TRAI has put 72GHz, 72,097.85MHz precisely, of the spectrum with a validity of 20 years up for bidding, which began at 10 am today. The frequency bands available are 600MHz, 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 3300MHz, and 26000MHz (26GHz). Not all of these bands are for 5G, but they, combined with the ones dedicated to 5G services, will offer better coverage. Thus, they are essential for telecom companies.

For telecommunication, the best range is 400MHz to 4GHz, according to the GSM Association. For years, telecom services have been available using some of the bands from this range. The 900MHz is the most used band, responsible for 2G and 3G services. 4G uses 850MHz, 1800MHz, 2300MHz, and 2500MHz. The bidders already have acquired some amount of spectrum in some of these bands. In India, 5G will use 600MHz, 700MHz, 800MHz, 3300MHz, and 26GHz. The 700MHz is the most premium band, while the 26GHz is the fastest millimetre-wave spectrum band.

The 5G spectrum bands are classified into low, mid, and high spectrum ranges:

The low spectrum bucket has frequency bands of less than 1GHz, such as 600MHz or 900MHz. This is the most suitable band for covering long distances without needing many towers to amplify the signals. These bands are also used for wide coverage in cities for mobile and broadcasting services. Basically, these bands cannot carry data at high speeds, which is why while they are available over many miles, the internet speed is not ideal. But carriers combine the low-spectrum bands with high-spectrum ones to amalgamate both speed and coverage.

Then comes the mid-spectrum band, which ranges from 1GHz to 6GHz (1800MHz, 2100MHz, and 2300MHz). It is also referred to as the sub-6GHz spectrum band, which is what the non-standalone 5G services are based on. These frequencies are better in terms of speed and carry more data over reasonably long distances but their coverage falls a little short of low-band waves.

Finally, you have the high spectrum band that covers frequencies between 24GHz to 40GHz. These are known as millimetre waves and provide the fastest internet. When not obstructed by an object, the mmWave frequencies deliver the highest possible speed to devices. These speeds are, thus, meant for 5G compatible devices.

Who is bidding for what?

Jio, with the highest EMD, is expected to bid for the premium 700MHz spectrum, which is ideal for consumer-centric applications. The telecom company is likely to spend to the tune of Rs 1,30,000 crore on buying airwaves.

Airtel has deposited a lower sum of EMD, suggesting its bidding will be restricted in the 3.5GHz and 26GHz bands. This means the rival to Jio will not be as aggressive in terms of offering higher 5G speeds. The same is with Vi, which, with an EMD of Rs 2,200 crore, is likely to bid for the minimum required spectrum of 50MHz in the 3.5GHz band and 400MHz in the 26GHz band.

Adani Data Networks will go for just the 26GHz band, as indicated by its EMD. The Adani Group has already said that it does not want to offer consumer services right now and that the 5G spectrum it will buy will be meant for its private network. Gautam Adani, the group’s chairman, said it will use 5G spectrums to bolster its data network in the country. However, experts believe the company could offer its privately-owned spectrum on a lease, giving Adani Data Networks an upper hand over others in terms of revenue.

5G spectrum auction FAQ: What is it and what does it mean for Jio, Airtel, Vi? View Story