Relevance: GS-3: Infrastructure; Awareness in the fields of IT.

Key Phrases: Multiple frequency bands; Spectrum Auction; low latency; high speed; TRAI, DCC;

Context

• Recently, the Union cabinet took the first steps towards rolling out 5G services, approving the auction of spectrum.
• The auction will include the spectrum across multiple frequency bands.
  • It is slated to commence on July 26.

Key Highlights

What is 5G?

• 5G stands for 5th Generation mobile communication technology.
• It is the next-generation cellular technology that will provide
  • faster and more reliable communication.
  • Communication with ultra-low latency.

Benefits :

• It will enable the delivery of critical services such as telesurgery and the Internet of Things over a mobile network with unprecedented efficiency, in addition to opening the floodgates for innovative applications that require a massive amount of high-speed bandwidth.
• The biggest benefit for millions of mobile users in a country like India is that 5G promises to make wireless networks close to what wireline broadband networks offer- uninterrupted service and unlimited bandwidth.

How 5G is different from 4G?

Steps taken by the government to boost the 5G ecosystem

• Easing some of the constraints which were irritants in the past. This has resulted in a fair amount of spectrum being put up for the auction.
• Dropping of the usage charge.
• Easing of payment terms.
  • Telecos have been allowed for payment for the spectrum to be spread out over 20 equal installments, it will ease immediate cash flow concerns.
  • The government has also allowed bidders the option to give up the spectrum after 10 years, without any liability for the balance payment.

Pending Challenges

• Retaining reserve price of the spectrum
  • Telecom operators have repeatedly asked to review it.
  • Telcos have requested a 90% reduction in the reserve price but the TRAI has recommended it to be around 30-40%.
    • However, in line with the recommendations of the Telecom Regulatory Authority of India (TRAI) [also accepted by the Digital Communications Commission (DCC)], the reduction in the reserve price has been of a much lower magnitude, around 35-40%.
  • Considering the high reserve price for the 700 MHz band, there is a possibility that this band may remain unsold this time as well.
    • This was in high demand amongst Indian telcos.
  • As per some estimates, the industry is likely to spend around Rs 1.1 lakh crore in these auctions.
    • The debt burden of the already over-indebted telcos will increase further.
• Loss in Revenues due to direct and individual allocation
  • The government has made it possible for enterprises, mostly tech companies, to be directly allocated spectrum by the Department of Telecommunications to engage in the Internet of Things (IoT), machine-to-machine communications etc.
  • Telcos had earlier opposed this move on grounds of a potential loss in their revenues — according to their estimates, 40% of 5G revenues accrue from the enterprise services.
    • Difference between Retail use and Enterprise use - Retail use is for individuals and freelancers, who are more decentralised whereas enterprises are more business-like and concentrated.
    • Movement from Enterprise Use to retail use would require more capital expenditure but will lead to wider capacity development for potential usage of new technology.
  • However, the government has leaned on the side of tech companies.

Conclusion

• In the initial years, the network capital expenditure would be relatively low. This is because initially, 5G will have more enterprise use cases. But as retail use cases evolve, a successful rollout of 5G services across the country will lay the ground for a digital transformation, having wide-ranging implications for economic activity. There is no doubt that the fifth-generation wireless technology will bring massive improvements in consumer broadband services and industrial applications with the potential to drastically alter societies through its wider impact. It is important to ensure that the industry is well-positioned to put the infrastructure in place to bring the benefits of this new technology to consumers.

Source: Indian Express

Mains Question

Q. What is 5G? What steps have the government taken to improve the 5G ecosystem? How can these be resolved?