While the much-awaited 5G auctions are expected to conclude without much competition due to abundant spectrum, experts note that telcos will be fighting it out to become the top bidder to acquire the cleanest possible spectrum in the new 5G band 3.5GHz.
Experts tell BusinessLine that operators will try to take as much spectrum as possible in the upcoming auctions to get a competitive advantage while bidding for 3.5GHz
3.5GHz is the new spectrum band being introduced in this auction, and it will be the core band for the 5G rollout for the operators. A total of 330 MHz of spectrum is available in this band for auction. However, 130 MHz of this spectrum is not available in certain locations in 6 LSA’s- 100MHz of this spectrum will also not be available near international borders. Therefore this is an “unclean spectrum”. This means that the operator who gets assigned this “unclean spectrum” would have a patchy 5G network in certain areas and cannot boast of nationwide 5G coverage in the future. Experts also note that certain major Indian cities could also experience patchy 5G coverage under these “unclean” spectrum bands. Only 170 MHz of spectrum is “clean” which means it is available nationwide.
As per the assignment rules specified by the Department of Telecommunications, the operator who will get assigned spectrum first in 3.5GHz, will have the most aggressive bidding strategy in the 5G auctions overall.
Since the operator will be assigned spectrum first, it will also get to pick the choicest “clean” spectrum, which ensures uninterrupted 5G coverage. If that operator purchases more than 100MHz of the clean spectrum, the remaining operators will be forced to buy an unclean spectrum. The second most operator can get away with buying clean spectrum, if it reduces the amount of spectrum it buys. However, the operator which purchases the least spectrum- will get the worse pickings, purely getting 5G spectrum unavailable in certain areas.
According to experts, the operator who gets assigned spectrum first will be incentivised to buy the maximum spectrum in 3.5MHz to ensure that it prevents the other operators from buying the clean spectrum.
The rules of the auction thus force operators to bid aggressively, however, certain operators’ own financial constraints could prevent them from doing so.
While most observers don’t believe that Adani will l bid for the 3.5 GHz, if it joins the competition, it would complicate matters even more.
Published on
July 17, 2022
