700MHz band spectrum sale: India loses opportunity to unveil affordable internet

crucial 700MHz band spectrum auction
The government’s attempt to maximise revenues from the sale of the crucial 700MHz band spectrum auction by fixing a high base price scared away the bidders.

There were no takers for the premium 700MHz band spectrum in the auctions conducted earlier this month despite a 40% cut in base price. It is ironical that the band, crucial for rolling out the 4G and 5G services, went unsold in a country that takes pride in its digital prowess. The band went unsold also in the previous auction conducted in 2016.

It is difficult to fathom the high reserve price set for the band in the spectrum auction 2021 at a time when the Narendra Modi government is looking to achieve quality internet connectivity even in the remotest of villages in the country. Without high quality internet connectivity at affordable prices, Modi’s Digital India may remain a distant dream. The 700MHz band contains frequencies between 698 and 806 MHz, and is crucial for service providers using the 4G and 5G technologies.

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Why 700MHz key to internet penetration

It is important to understand why the 700MHz band is vital for the plans to spread internet connectivity in every nook and corner of India. The shift of UHF from analog to digital by Doordarshan has freed this band and using the existing transmission towers of Doordarshan service providers can offer high-speed internet connectivity at a very low cost. The 700 MHz band is located just above TV broadcast channels and thus have excellent propagation characteristics. This allows the 700MHz band signals to penetrate buildings and walls easily to cover larger geographic areas without additional infrastructure.

The coverage of 700MHz is 0.95 square km in the dense urban and 2.84 square km in urban areas, while its suburban and rural coverages are 22.16 square km and 140.37 square km respectively. It is 5 times more efficient compared with 1800 MHz, which has a coverage of 37.71 square km in rural areas and twice as efficient as the 900 MHz band. It is approximately 70% cheaper to provide mobile broadband services in 700 MHz, compared with 2100 MHz and enables quick network rollout.

Financial inclusion, healthcare and education are now becoming more and more internet dependent and India must put to use the 700MHz band to bridge the digital divide. Also, e-commerce will also become more effective, opening up market for Micro, Small and Medium Enterprises (MSMEs).

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No bidders for 700 MHz, 2500 MHz bands

Large telecom service providers such as Reliance Jio, Bharti Airtel and Vodafone Idea had urged the government to ensure affordable prices for the spectrum. The government auctioned more than 2,308 units of spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands in the current round of auctions. OF these, the 700 MHz and 2500 MHz bands failed to elicit any response from the bidders.

The base value of the spectrum was unreasonably high, which has intimidated prospective bidders. The approach of revenue maximisation needs to change to ensure high-speed internet connectivity in the remote corners of the country, which, in turn, can achieve inclusive growth. There seems to be a complete lack of appreciation of the potential of this particular band. India has adopted direct benefit transfer mode and all management information system of the government has been digitized. The government can connect all panchayats with high-speed network using 700 MHZ band to improve education and healthcare infrastructure at a low cost.

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This frequency range can provide effective mobile broadband services such as 4G in rural areas which have no fixed-line internet network. The 700MHz band spectrum is used across the world because of these inherent advantages. The spread of optical fiber network will improve connectivity, but optimial use of the existing towers can be achieved at a low cost by using this idle resource.

The government should resist from contributing to the digital divide in the country by focusing on revenue maximization. The focus should be on ensuring that no area is left behind in new avenues such as e-commerce and learning processes. It is important to have an entirely different approach towards the 700MHz band as it can achieve the objective of fast internet connectivity at affordable prices.

(Aruna Sharma is a New Delhi-based development economist. An IAS officer of the 1982 batch, she retired as a secretary with the government of India.)spectrum auction: 700 MHz band can be sold in next auction, will refer back to Trai for pricing relook: Telecom secy, Telecom News, ET Telecom (indiatimes.com)modi’s