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Summary: TRAI’s response to DoT on upcoming 5G auction

The back-and-forth offers a glimpse of how the spectrum auction will play out.

It is for the DoT (Department of Telecommunications) to decide whether the frequency range 27.5- 28.5 GHz is to be allocated/auctioned for IMT/5G, the Telecom Regulatory Authority of India (TRAI) said in its response to suggestions sent by the DoT. The telecom department, in its letter dated April 29, 2022, had urged TRAI to reconsider some of the recommendations it had made in the context of the upcoming 5G spectrum auction.

“DoT is of the view that the auction of spectrum band 27.5-28.5 GHz may be deferred pending TRAI recommendations relating to auction of spectrum for space-based communication services. Accordingly, spectrum availability for the forthcoming auction may be reduced,” read the letter.

TRAI wrote that the DoT will take time to furnish the information sought by the telecom regulator on space-based communication services. “Therefore, to avoid delay in 5G roll-out, TRAI may go ahead with consultations/recommendations on issues excluding space-based communication services,” TRAI reasoned which led to its recommendations.

The telecom regulator clarified that its recommendations concern (International Mobile Telecommunications) IMT/5G and not space-based communication. Moreover, it had also proposed the coexistence of the “Satellite Earth Station Gateway (Earth to Space) with IMT in its recommendations.

The exchange between TRAI and DoT indicates that the satellite communications industry which had asked for the hotly-contested 27.5- 28.5 GHz frequency range to be reserved, can maybe rest easy for now.


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Key recommendations revisited by TRAI

Here are some of the measures enlisted in the document:

Spectrum Reserve Price: TRAI had recommended that the reserve price (minimum price point at which a seller is willing to sell) of spectrum allocation in the case of 30 years must be equal to 1.5 times the reserve price of spectrum allocation for 20 years for the respective band. It was not well-received by the telcos as MediaNama had reported then. In its response, the regulator said that the valuation of the spectrum for the increased allocation period of 30 years should be proportionately higher than the valuation of the same spectrum for an allocation period of 20 years.

Spectrum Validity: TRAI clarified that its recommendation regarding the increase in duration of spectrum assignment to 30 years for future auctions was based on the government’s decision conveyed by DoT for future auctions. “However, it is for the DoT to decide upon the validity period of spectrum assignment through the auction,” TRAI concluded in its response.

  • DoT’s view:  The department batted for a validity period of 20 years for spectrum assignment in the upcoming auction since “TRAI has conducted (a) valuation exercise to arrive at Reserve Prices, for an allocation period of 20 years as done in previous exercises and recommendations.”

Roll-out obligations: TRAI said that spectrum bands 3300-3670 MHz and 24.25-27.5 GHz should not be auctioned in a bundled manner and reiterated its recommendation that the government should stick to separate band-specific minimum roll-out obligations. “Technical characteristics of these two bands are quite different and use cases likely to be deployed using these spectrum bands are also likely to be different. Possibility of a bidder acquiring spectrum in only one of these bands and not in both the bands, cannot be ruled out. Imposing combined roll out conditions on a TSP acquiring spectrum in one of these bands will not be justifiable,” the regulator reasoned.

  • DoT’s view: The department had said that “minimum roll-out obligations should be applicable in a combined manner to 3300-3670 MHz band (5G frequency range) and 24.25-27.5 GHz band, i.e. the number of sites to be deployed in LSAs (Licensed Service Areas) should be a combined target for these two bands”. It means that the DoT wanted to include cell sites of both bands under the minimum roll-out obligations for 5G networks.
  • COAI’s objection: The Cellular Operators Association of India, a telecom industry body, had expressed concern over the introduction of mandatory roll-out obligations for 5G networks. “…without even factoring the huge cost of such rollout, the TRAI has delinked itself from reality. It’s best to let the service providers be the judge for roll-out of networks based on market dynamics. No operator invests in large quantum of spectrum and network capex and opex without a clear monetisation roadmap,” it had said in a statement.

Spectrum valuation at short intervals: “…the Authority does not agree with DoT’s proposal to seek the Authority’s recommendations before conduct of every (annual/ shorter interval) auction, as this would not be necessary unless DoT comes to a conclusion that the changes in the techno- commercial ecosystem and other factors warrants a fresh valuation,” TRAI wrote in its response. TRAI said that it does not believe that parameters change much in a short time span.

  • DoT’s view: The department suggested that spectrum valuation at shorter intervals may be preferable given the fast-changing techno-commercial ecosystem. “For instance, in LSAs/bands where spectrum remains unsold, there could be a case for reduction in reserve prices. Hence, it is proposed that recommendations of TRAI on spectrum pricing would be sought before conduct of every auction,” read the letter.

Spectrum availability in the auction: “The matter related to reserving spectrum for BSNL/MTNL is to be decided by the Government. The Government may have considered that the quantum of spectrum reserved for BSNL, specially in mid-band, is adequate with respect to the use cases of the technology being proposed to be deployed. It is also desirable that spectrum being reserved for BSNL is put to use at the earliest,” TRAI wrote in its response.

  • DoT’s view: The department said that spectrum should be reserved for BSNL in all 22 LSAs. It also called for the following bands to be excluded from the spectrum available for the upcoming auction:
    • 10 MHz (paired) i.e., 612-622/663-673 MHz
    • 40 MHz i.e., 3630-3670 MHz
    • 400 MHz i.e., 24.25-24.65 GHz

Private Captive Networks: TRAI wrote that the DoT should allow private enterprises to obtain spectrum on lease from Telecom Service Providers and establish their own isolated Captive Wireless Private Network. “Further, the third option of leasing of spectrum is essential to meet the demand for private networks. The leasing option can be implemented now itself,” the regualtory body urged in its response. TRAI had earlier proposed four ways for meeting the demand of enterprises for private cellular networks:

    • Network Slice from Telecom Service Provider’s PLMN network.
    • Request TSPs to establish an independent isolated private network in enterprise’s premises using the TSP’s spectrum
    • Obtain the spectrum on lease from TSPs and establish their own isolated network.
    • Acquire spectrum directly from DoT
  • DoT’s view: “TRAI’s recommendations on Captive Wireless Private Networks (CWPNs) require further study of ecosystem including demand assessment, business models, implementation framework, etc. Therefore, these TRAI recommendations on Private Captive Networks may be considered at a later stage,” the department stated. The DoT has permitted the first two options.

5G spectrum auctions likely in June

Minister of Communications Ashwini Vaishnaw recently revealed that the government was likely to conduct the auction for 5G spectrum in early June. Vaishnaw said that the government is deliberating upon the telecom industry’s concerns around spectrum and will come out with a plan to address them. He did not elaborate any further.

The central government has been pulled up by the Parliamentary Standing Committee on Communications and Information Technology over the delay in the launch of 5G services in India, in its report on ‘India’s preparedness for 5G’.

A delay would “deprive the country of taking advantage of various benefits of 5G when other countries have made noticeable progress in deployment of the technology,” the committee had said.

In a notable omission, TRAI and DoT have not addressed one critical demand of the telcos which dealt with a reduction in the reserve prices. The DoT said that it has accepted all of TRAI’s recommendations except for the ones highlighted in its letter to the authority. This suggests that the two agencies are in agreement over the reduction in the base price staying in the range of 30-40 per cent.

It is sure to ruffle feathers among India’s major telecom companies as they had demanded a 90 percent reduction. Vaishnaw had indicated that the government was reaching out to various stakeholders but it seems like the government is proceeding ahead with the base prices proposed by TRAI.

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Written By

I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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