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Cabinet clears auction of 5G spectrum to enable telcos roll out 10 times faster services than 4G this year

Photo for representation.

The Union Cabinet has cleared the auction for 5G airwaves paving for the commercial launch of next generation telecom services this year which will be 10 times faster than existing 4G services.

According to a government statement issued on Wednesday, the cabinet in its meeting on Tuesday approved the Department of Telecom's (DoT) proposal for the auction of 72 GHz of spectrum for a 20-year-period.

The union cabinet has also decided to enable the development and setting up of Private Captive Networks, the government said, to spur a new wave of innovations in Industry 4.0 applications such as machine to machine communications, Internet of Things (IoT), Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy, and other sectors.

New-age businesses are set to benefit with the big move, which will also create additional revenue for enterprises.

The last date for submissions of applications for bids is on July 8, after which the DoT will publish the ownership details of applicants on July 12.

Telecom Sector Reforms, announced in September last year, are expected to benefit the auction. The requirement of submitting a financial bank guarantee equivalent to one annual instalment has also been done away with.

“Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year. This is expected to significantly ease cash flow requirements and lower the cost of doing business in this sector. The bidders would be given an option to surrender the spectrum after 10 years with no future liabilities with respect to balance installments,” the government announcement said.

“The availability of sufficient backhaul spectrum is also necessary to enable the roll-out of 5G services. To meet the backhaul demand, the Cabinet has decided to provisionally allot two carriers of 250 MHz each in E-band to the telecom service providers. Besides, the cabinet decided to double the number of traditional backhaul carriers in the existing frequency bands of 13, 15, 18 and 21 GHz bands,” it said.

“Digital connectivity has been an important part of policy initiatives of the government through its flagship programs such as Digital India, Start-up India, Make in India and others,” an official statement said.

Last month, the Digital Communications Commission approved the auction of 5G  airwaves. While mobile service providers had lobbied for 90 per cent reduction in the base price, it only recommended 36 per cent accepting the suggestion of Telecom Regulatory Authority of India.

Also read:  India has moved on rapidly to 5G after losing a decade due to 2G scam, says PM Modi