Spectrum the valuable natural resource

India’s latest auction of telecommunications spectrum, including of bands ideally suited for offering fifth generation (5G) technology services, drew bids exceeding a record ₹1.5 lakh crore in a clear sign that the industry is on the path to recovery. While the Government has netted just over a third of the ₹4.3 lakh crore reserve price it had set for the spectrum on offer, the fact that 71 percent of the airwaves on the block won bids is testament to the improvement in the industry’s health. The Centre’s move last year to ease regulatory norms around payment of dues, including a four-year moratorium on outstanding payments and the redefinition of adjusted gross revenues to prospectively exclude non-telecom earnings, allowed service providers a breather and helped them attract investor interest as also spread liabilities over a staggered period.

Separately, industrywide increases in tariffs also helped lift average revenue per user at the telecom service providers, boosting margins. The Government’s policy decision to return bank guarantees to telcos must have helped improve their eligibility for debt – crucial for capital expenditure. And with spectrum usage charges also binned, the enhanced flexibility likely allowed enthusiastic participation from all three private players.

Successful spectrum management is a long-term effort. The primary goal in all spectrum awards should be to encourage efficient spectrum use and the significant investment necessary to provide high-quality mobile services. When done right, mobile operators can feel safe to make investments to improve coverage and speeds This, in turn, leads to huge benefits for the whole of society.

Spectrum licences for mobile telecommunications define the frequency band, geographic reach and duration of spectrum usage rights. They may also include conditions such as fees and charges, network coverage and roll-out requirements, and technical or service parameters. All of these parameters have a major effect on how mobile networks are rolled out. Spectrum should be made available in a fair, transparent and predictable way. If this is done over the long term, operators can feel safe to make investments, which, in turn, can lead to massive benefits for the whole of society.

The roadmap for spectrum access should be made transparent by governments and regulators to optimize network planning and reduce capital expenditure. By working together with industry, governments can help ensure connectivity is affordable.

Planning spectrum for 5G
5G will support significantly faster mobile broadband speeds and heavier data usage than previous generations of mobile technology while also enabling the full potential of the Internet of Things. From connected cars and smart cities to the industrial internet and fibre-like FWA, 5G will allow more devices to access more data than ever before. The efficiency of 5G will be essential to preserving today’s most popular mobile applications, such as on-demand video, in an environment of high-user demand. It will help ensure that growing capacity demands can be sustained, but requires access to low-, mid- and high-band spectrums.

Outlook
Mobile networks are the fastest and most afford­able way of connecting people to voice and data services all over the world. Effective spectrum management is critical to realize the full potential of mobile broadband. Without it, mobile operators can’t meet the rapid increase in demand for higher speeds and better coverage. The basic tenants of managing spectrum successfully are ensuring access to sufficient spectrum, providing predictability and avoiding costly restrictions. When it comes to awarding spectrum, there is no single best approach. Whether an auction or another method (such as administrative assign­ment) is adopted, the imple­mentation of the approach is important. The smart utilization of multiple bands and improve­ment of spectrum efficiency through advanced technologies are essential to achieve high throughput in limited bandwidth.