The 5G auction has finally come to an end, completing the first-ever spectrum auction in the United States. The highlight of this three-day event was an unprecedented $44 billion worldwide purchase of spectrum by Samsung. This sale is expected to accelerate 5G deployments across America with a faster, more mobile and reliable wireless connection than ever before.
This spectrum auction also marks a transition towards a new type of government-led auction process. Until now, the FCC had held open-to-all auctions for licenses for microwave bands at the lowest possible frequency, which drew almost no demand from telecom companies. In recent years, those licenses sold for less than $100 per megahertz per population served.
The winner of the auction was Verizon, which emerged with 79 licenses in the lower 10 GHz frequency band. These licenses are important to Verizon as they will allow the company to launch services that use 5G technologies very early in their lives, helping achieve its goal of building an end-to-end 5G wireless service.
How much spectrum was bought by the applicants?
The FCC completed the 5G auction with a final price of $44.9 billion. The impressive proceeds will be used to fund the FirstNet broadband network for public safety, as well as universal service programs to expand and enhance broadband access in rural areas and Tribal lands.
A total of 40MHz of the spectrum was auctioned off over the course of three days. The largest amount, $18.6 billion, was purchased on the 700MHz band while the final price was $14.1 billion for the remaining 30MHz of spectrum. Samsung spent the most at $19.2 billion while Verizon Wireless spent another roughly $9 billion with AT&T followed close behind at around $8.
As the first real proof that 5G technology is on its way, the auction was an important event for the mobile industry. At its core, it was all about making sure that mobile providers have the capacity to deliver a faster and more widespread network. In addition to bidding on additional spectrum, those interested in 5G also spent a considerable amount of money to acquire existing licenses. For example, Verizon paid $3 billion for spectrum licenses in the top 12 spectrum blocks in major cities such as New York, Los Angeles and Chicago.
What is the reason behind the auction fetching more cash than estimated?
Before the auction, the FCC predicted that more than 50MHz of spectrum would be sold for $10 billion or less. But in the end, there was a bidding war among carriers that drove up the price per MHz by 25 times above market price. Several factors explain this surge of demand. First, it is widely believed that 5G is the next generation technology after 4G and will be widely adopted by mobile carriers within a decade.
The auction helped the FCC raise $44.9 billion, which will go to various public safety initiatives as well as universal service programs. Although the FCC had hoped to raise $55 billion for FirstNet, the program that will provide broadband services for public first responders, it is still considered a resounding success.
What is the impact of 5G on the wireless industry?
The 5G spectrum auction has been a major achievement for telecommunications in America. By allowing more mobile spectrum at a time when there is increasing demand for data and broadband devices, the auction’s results could have implications for the entire wireless industry . In particular, it will create demand for long-term spectrum leases and allow carriers to equip their networks with higher capacity.
What has been happening in this spectrum auction?
This week, the Federal Communications Commission (FCC) finally held the much anticipated 5G spectrum auction. The auction was scheduled to last three days but ended at midnight as a result of a bidding frenzy that sent prices sky rocketing. The staggering 38 billion dollars final price is nearly 25 times higher than the initial estimate of 450 million dollars.
It is first time in more than two decades that the FCC has allocated new spectrum licenses to wireless carriers through an auction. During the auction, FCC licenses were sold to entities that include wireless providers and the wireless industry, governments, and the public.
What are the benefits of 5G?
With greater speed, more capacity and enhanced connection, 5G is able to provide a better service to all users. The Internet of Things (IoT) is one of the major applications that will be enabled by 5G technology. IoT has been at its peak during the last few years with smart devices becoming smarter every day.
The applications of 5G technology are many and it is widely believed that 5G will become a necessity in every household. For example, newer smart phones will have the ability to connect to new types of sensors that provide home health monitoring, real-time location and imagery. In addition, the future of autonomous vehicles will rely on data to provide driving directions and enable efficient traffic flow.
How did Jio, Airtel, Vodafone Idea and Adani Group bid?
The bidding was conducted in two stages. The first stage was to buy spectrum in the 28GHz, 39GHz and 39GHz-39GHz frequency bands. The winning bidders for the first stage were Jio, Airtel, Vodafone Idea and Adani Group. Similarly, the remaining bidders had to bid for spectrum in the lower 10 GHz frequency band.
The government had set a limit of 6.6 billion dollars for the auction to be held in the 28GHz to 39GHz band, and 29.1 billion dollars for the 1st stage, which includes spectrum in the lower 10 GHz frequency band. It is expected that business will continue after completion of 1st stage though prices are likely to go up in 2nd stage as well.
The government had set a reserve price of 497 million dollars for 1 MHz (megahertz) of spectrum in the 28GHz to 39GHz band. And for the 1st stage, the reserve prices were set at $1,555 million for 10 GHz bands, $1,876 for 15 GHz bands, $2,975 million for 18 GHz bands and $3,475 million for 24 GHz bands.
What will the auction of 5G spectrum mean to users?
After the recent auction of 5G spectrum, the government has made it clear that 5G services will be launched in India by 2020. With 3-4 players expected to hold pan-India licenses for 5G, telecom operators in India are expected to roll out this technology by next year. However, it is still not clear what kind of services and devices will be enabled by 5G.
How did the price of spectrum go up?
The bidding was intense in all the designated bands. The high price can be attributed to two main reasons. First, there are only a few wireless providers in India, who are poised to make over-the-top investments in 5G services with a view to profit from them. For example, only 4 players—JIO Infocomm Ltd, Bharti Airtel Ltd and Vodafone India Ltd—have been buying airwaves at the auction.
Secondly, the likelihood of data consumption throughout India will increase with the launch of 5G. With 5G, more images, a higher number of applications and services such as virtual reality (VR) will be accessible through smartphones. The country’s smartphone users collectively share billions of daily data connections and this trend is expected to grow manifold with the launch of 5G services in the country.
How competitive was the bidding?
As part of the auction, the government has put 4 users each for the 28 GHz spectrum band and 10 GHz spectrum band. The other users were Vodafone Idea Ltd, Reliance Jio Infocomm Ltd, Bharti Airtel Ltd and Adani Group. Bidding for all the bands was intense with all bidders spending more than expected to have access to 5G services.
What is the fate of the spectrum that was not purchased?
The unsold airwaves will be offered during the second phase of the 5G auction, to be held next year. The government will carry out this process in a staggered manner and will keep allocating spectrum based on demand. For example, most of the spectrum allocated for 5G services in this auction went to companies such as Jio, Airtel, Vodafone Idea and Adani Group.
This means that companies that were not able to buy 5G spectrum will have to wait for an improved spectrum auction next year. The price of such airwaves is expected to be higher than the current auction. The Telecom Regulatory Authority of India (TRAI) has announced a consultation paper for the allocation of 5G spectrum in India, which states that it may be necessary for the government to allocate frequencies above 20 GHz for 5G services.
Which telco got what, what bands were sold the most
The telecom sector is once again abuzz with news of a spectrum auction. This time, however, the big story is that five telcom won spectrum in every band in the upper 28 GHz and lower 10 GHz frequency bands. The government has allocated 4 MHz of spectrum in each band to be auctioned, and it is expected that bidding will be intense.
The government has been auctioning 5G spectrum separately from 4G spectrum. Users are expected to benefit the most from 5G, and the telecom industry is looking forward to an explosion of data growth. In the last auction of 4G spectrum in 2012, the government had set a reserve price of 560 million dollars for 1 MHz of spectrum. It was a record high for telecom companies.
The reserve price in the latest auction is set at 497 million dollars for 1 MHz of spectrum. It is expected that this time too, the government will not compromise on the reserve price for airwaves. However, experts believe that the bidding will be intense because there is a need for more 5G spectrum in India.
Reliance Jio was the top bidder
India’s largest wireless operator, Reliance Jio Infocomm Ltd, was the top bidder in the country’s spectrum auction. The company has bought spectrum in all bands that were put up for sale during the auction. In fact, it was among 15 bidders who competed for the upper 28 GHz and lower 10 GHz bands.
In total, operators bought airwaves worth $1.75 billion in the auction. Reliance Jio, along with Bharti Airtel and Vodafone Idea, were among the top bidders for all bands. On the other hand, Bharti Airtel and Vodafone Idea were among the top bidders in only some bands. The government had set a limit of 6.6 billion dollars for the auction to be held in 28 GHz to 39 GHz band and 29.1 billion dollars for 1st stage, which included lower 10 GHz band spectrum.
What are the potential plans for 5G spectrum
In a recent meeting held by the Telecom Commission, it was mentioned that there were two uses of spectrum in India. The first is connecting Indian cities with fiber or fiber-based access. The second is to provide wireless coverage in rural areas, which is expected to be done through a 2G network. However, there has been no clarity on this.
There are only a few of the 4 major telecom operators in the country which have developed an infrastructure that can support 5G technology. The launch of 5G will also require a different ecosystem from the existing one as it is based on very new technology. There will be new equipment, new software and new business models that need to be nailed before it can be offered for users.
What’s next for the bidders?
All the bidders have been allocated spectrum in different bands. However, they won’t be able to start offering 5G services immediately because they need to build new technology and lay down new infrastructure. In addition, users in India will only be able to access 5G once the government launches it across the country, which could take at least one year.
The current criteria for launching 5G services is not clear and there are no official standards available that can be used by providers. In this context, the government will have to come up with a new set of guidelines that can be followed by the bidders. 5G is likely to change everything in India, especially considering the need for 5G services across the country. The government has plans to make all Indian cities connected by 2025 and entering this technology into the market can help in achieving that goal.
What are the possible uses of 5G?
5G is expected to be the next big thing in India and it will bring a new age of technology. It will help in providing better facilities to the masses and it may even lead to a new revolution in technology. It has got potential to change many things and transform the existing infrastructure completely.
It will provide companies with an opportunity to launch the Internet of Things (IoT) concept in India. The Internet of Things is expected to transform business models and infrastructure. It is a trending topic that has been embraced by the world, but it is still in its infancy in India. According to IT industry leaders, one of the major challenges for 5G is to make it flexible enough so that it can be used for building new business models with IoT services.
Conclusion
The government of India has put a lot of effort into conserving natural resources. They have managed to conserve their forests and rivers in recent years. However, they need to conserve their spectrum as well in order to better serve their citizens. There is a need for more spectrum, and that also in the 5G band. The government has auctioned 5G airwaves at a very high price which is likely to bring about more buzz about spectrum auctions in the country.
The 2011 auction for airwaves used in India’s 2G and 3G mobile phone networks was the world’s largest ever-including five times the previous record of US$ 8.8 billion in a 900 MHz auction in 2008. The spectrum at stake in India was just 35 megahertz (MHz), but the total price tag-after commissions, fees and taxes was over $10 billion.
India’s Ministry of Information and Broadcasting released the second delegated authority report (DAR) and also asked all telecom companies to submit their suggestions by September 30, 2011. The issue of valuable airwaves lying idle or unutilized was discussed but the government did not make any announcements regarding auctioning of 5G spectrum in India.
India’s total spectrum holding is about 1,720 MHz of which the government and public sector bodies (PSBs), hold around 1,600 MHz. As per TRAI recommendations, the private sector should get a share of 60% spectrum in metro areas and 40% in non-metro areas. However, the reverse is true today. The government’s significant airwaves holdings is the reason for this and there is a need to fix this imbalance before 5G spectrum can be allotted properly.
In 2012, the telecom department of the Indian government announced plans for a new broadband wireless access (BWA) spectrum auction. The auction will be held in 2013 to offer airwaves for use in India’s internet and mobile phone networks. The government has estimated that it would need 400 MHz to 5 GHz of spectrum to build a 4th generation (4G) LTE network. The new system will be called “Revised Status Quo BWA Spectrum Allocation Plan” or RSBAP.
edited and proofread by nikita sharma
