As we all know that spectrum is a lifeline of telecom industries, more spectrum means more consumer satisfactions and in simple terms the more the merrier. But what does it mean and why is it important for the sector?
Everythring about Spectrum and Spectrum Auction
You must have heard this word (Spectrum) many times but not too many know what it exactly means.
Spectrum refers to electomagnetic waves of different wavelengths. It relates to the radio frequencies allocated to the mobile industry and other sectors for communication over the airwaves. In telecom industry it is regulated and allocated by the Government to operators. Any telecom operator can buy or lease a spectrum and transmit its services in a particular range.
Currently in India, we have 2G, 3G and 4G, the 2G networks were first launched in 1991 (in Finland). 2G is known as "Second-generation wireless telephone technology". And in common man's language it means wireless transfer of data from one place to another. 3G networks succeed 2G and it offers faster data transfer rates. It also enables video calls, then comes 4G, a fourth generation. The 4G network is providing ultra-broadband internet access for mobile devices.
Meanwhile, the Government is also working to ensure that India embraces 5G telecom networks in tandem with the rest of the world, unlike 3G and 4G technologies.
However, South Korea is expected to be the first country to rollout 5G network services in time for the 2018 Winter Olympics.
Why it is important, why Government auctions it and how do spectrum prices impact consumers?
Spectrum is a basic need or a resource for a telecom industy it acts as fuel for them and for consumers all wireless devices like phones and tablets depend on spectrum. In today's time, one needs to have good data speed to be connected and if you don't have sufficient spectrum, your speed will be reduced.
The first auction was held in 1994 and by autioning spectrum, government is actually attempting spectrum management. Like land, mineral, oil, gas and water are exclusive property of a state, so is radio frequencies. Government manage these frequencies, as it is scarce, for various uses like telecom, radio, television and defence. It impacts comsumers in two ways: one, by increasing their consumer base and second, by increasing their tariffs.
The last spectrum auction happened in October 2016, where the government got a lower-than-expected Rs 65,789.12 crore, as there were no takers in 700 Mhz and 900 Mhz, while the Vodafone India and Bharti Airtel emerged as the biggest buyers of 4G airwaves, followed by newcomer Reliance Jio Infocomm and Idea Cellular.
Vodafone spent over Rs 20,000 crore, Airtel Rs 14,244 crore, Jio Rs 13,672 crore and Idea Rs 12,798 crore to beef up 4G airwaves as the battlefield moves from voice to data for growth.
The Department of Telecom had placed an auction for radiowaves worth Rs. 5.66 trillion in October 2016, which fetched total bids worth about Rs. 65,789 crore.
However, the Government looks for spectrum auction every year.