Telecom Companies Push for 50% Cut in Reserve Price for 40GHz Spectrum Band to Boost 5G Services

Telecom companies are asking for a 50% reduction in the reserve price of the newly identified 40GHz spectrum ranges. This reduction is requested due to the higher cost of building networks in these high-frequency bands.

High Costs and Past Auctions

Telecom firms highlighted the high costs associated with millimetre band radio networks, which are significantly more expensive to deploy than current spectrum bands. They also noted that past auctions have seen limited bidding, suggesting that a lower reserve price could stimulate more interest.

New Spectrum Bands for Auction

This is the first time the 37-37.5 GHz, 37.5-40 GHz, and 42.5-43.5 GHz bands are being proposed for auction, offering a total of 4,000 MHz of spectrum for future 5G services.

Jio’s Perspective

Udai Kumar Srivastava, President of Reliance Jio, explained that network costs in the millimetre band are very high, making it expensive to deploy even for hotspot networks. He suggested that the 40GHz spectrum price should be set relative to the auction-determined price or current reserve price of the 26GHz band, which had a base price of ₹7.6 crore per unit in a recent auction.

Airtel’s Agreement

Bharti Airtel agreed with Jio on the need to cut the base price. They also suggested that each band should be valued based on its economic value and business case.

TRAI’s Consultation

In April, the Telecom Regulatory Authority of India (TRAI) started consultations on pricing and the amount of new spectrum that could be used for both mobile and satellite communication services.

Department of Telecommunications’ (DoT) Plans

The DoT has identified frequency ranges 37-37.5 GHz for mobile use, and 37.5-40 GHz as well as 42.5-43.5 GHz for both mobile and satellite gateway links. These frequencies will be available in the next auction.

mmWave Spectrum and 5G

This will be the first time that spectrum in the above-37 GHz bands, known as mmWave bands, will be auctioned in India. While mid-band is preferred for 5G, mmWave spectrum is also useful for 5G private networks.

Vodafone Idea’s Caution

Vodafone Idea (Vi) believes it is too early to auction these higher frequency bands, as the ecosystem is not yet developed. They pointed out that the 26GHz spectrum bought in 2022 has not yet been fully utilised.

Payment and Rollout Suggestions

Airtel suggested a six-year moratorium on payments and annual instalments over the remaining 14-year spectrum duration, with no upfront payment required. They also suggested that operators who have already met rollout obligations for the 26GHz band should not be required to do so again for the new bands. Jio, on the other hand, supported an upfront payment of 10% of the bid amount with a minimum five-year moratorium.

Tata Communications’ Proposal

Tata Communications recommended that the regulator allow ISP (Internet Service Provider) license holders to participate in the auction for short periods (5-10 years) and for smaller regions instead of circle-wise allocation.