The Union Cabinet on Wednesday gave its nod to conduct 5G spectrum auction for telecom services and do away with upfront payment for airwaves. The successful bidders can pay for 5G spectrum in 20 equated monthly instalments (EMIs), an official statement said. 

“The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a proposal of the Department of Telecommunications to conduct spectrum auction, through which spectrum will be assigned to the successful bidders for providing 5G services to public and enterprises,” the release said. 

A total of 72,097.85 mhz of spectrum with 20 years of validity will be auctioned by July-end. 

The Cabinet also decided to enable the development and setting up of private captive networks to spur a wave of innovation in new-age industry applications, such as machine-to-machine communication, Internet of Things (IoT) and Artificial Intelligence (AI) across automotive, healthcare, agriculture, energy and other sectors. 

The auction will be held for spectrum in various low (600, 700, 800, 900, 1,800, 2,100 and 2,300 mhz), mid (3,300 mhz) and high (26 ghz) frequency bands. 

Continuing the pace of telecom sector reforms, the Cabinet announced various progressive options with regard to the spectrum auction for facilitating ease of doing business. 

“For the first time ever, there is no mandatory requirement to make upfront payment by the successful bidders. Payments for spectrum can be made in 20 equal annual instalments to be paid in advance at the beginning of each year,” it said, adding that this was 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 instalments. 

“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,” it said.