India enters the last mile to 5G, spectrum auctions start today
However, allowing private operators to directly bid for spectrum has poured cold water on this business plan
Delayed, but downloading soon. As the spectrum auctions for starting 5G services in the country kick off today, on the menu is a brave new world of faster internet, as much as ten times faster, and more importantly, connectivity that can transform the way we work and play.
The government hopes to mop up as much as one lakh crore rupees once this round of auctions are complete.
A total of 72 gigahertz of spectrum, calculated to be worth 4.3 lakh crore rupees will be up for grabs for a period of 20 years to the three biggies who have already coughed up earnest money deposit (EMD) of nearly 22,000 crore rupees Reliance Jio (EMD of 14,000 crore), Airtel (Rs 5,500 crore) and Vodafone (Rs 2,200 crore), the three pan-Indian telecom operators, as well as surprise entrant Adani (Rs 100 crore).
The potential worth of bids during auction will be based on the earnest money. So for example, Jio's EMD of 14,000 crore rupees means it can bid up to 1.27 lakh crore rupees worth of spectrum if it wants. And so on.
The move to let private companies bid for spectrum to install their own captive 5G networks is a new provision introduced by the Union cabinet for 5G last month.
This was vehemently opposed by the Cellular Operators Association of India (COAI) comprising of the likes of Airtel and Vi.
There is a reason for that. With 5G expected to be expensive, at least at the starting stage, the telecom operators had been hoping to earn revenue by selling private networks to big industries, until when the costs come down enough for the general public to start adopting it.
However, allowing private operators to directly bid for spectrum has poured cold water on this business plan.
While there is much excitement over the impending arrival of 5G, a mix of cost and use-cases may just prevent it from going mainstream immediately upon eventual launch of service.
Beyond faster video calls and movie downloads, 5G's USP is in real-time connectivity that can help anything from Internet-of-Things (IoT) where factory machines to delivery vans are connected for seamless logistics, to sci-fi stuff like doctors operating on patients thousands of kilometres away. That may just have to wait for the time-being, from the looks of things.
This also raises the question of how telecom operators will make profits initially, after spending crores and crores on the auction.
However, that doesn't stop the dreamers of 'lightning fast' connectivity, with the gaming industry high up on the list.
