The state-owned company is scheduled to launch 4G services in select cities starting next month, and 4G and 5G network rollout will happen simultaneously.
Officials said a committee of the DoT had approved a proposal, a 10MHz block in the 700MHz premium band worth about 40,000 crore along with 70MHz in the mid-band (3600MHz to 3670MHz) worth about 22,000 crore to be awarded BSNL for 5G.
“The DoT committee has approved the proposal and it is now being discussed by the inter-departmental body DCC (Digital Communications Commission), after which Cabinet must finally give the green light,” an official told ET on condition of anonymity.
The spectrum allocation for 5G comes on top of the 1.64 lakh crore revitalization package released for the loss-making telecom company in July, the official said. BSNL is also preparing to issue a bond next week to raise around ₹8,500 crore. According to official information, the company plans to sell 10-year government-guaranteed bonds.
The allocation of 700MHz spectrum to BSNL is significant as it would allow the state-owned company to roll out 5G services nationwide, including rural areas, and better compete with private telecom operators like Reliance Jio and Bharti Airtel, it said Experts .
While mid-band spectrum (3300-3670MHz) provides capacity, low-frequency (LF) bands such as 700MHz provide telecom operators with a layer of coverage for 5G networks. In India, market leader Jio is rolling out 5G in standalone (SA) mode using a combination of 700MHz and 3300MHz frequency bands. Bharti Airtel, on the other hand, is currently using Non-Standalone Mode (NSA) for its 5G network by using frequencies in the 3300MHz band combined with the 1800MHz band for supply layer deployment.
Bharti Airtel, which does not have the 700MHz spectrum, has so far said it does not need the band nor will it buy it in the upcoming auctions, a move that will allow the government enough spectrum to allocate to BSNL.
However, analysts said that Bharti Airtel would benefit from a 10MHz block in the 700MHz band as it begins 5G rollout in SA mode in the coming years.
“Although the LF band is not essential for 5G SA, it does provide a competitive advantage. Considering various options that include existing LF and mid bands for SA, we conclude that acquiring 10MHz of the 700MHz band is among the better options for Bharti. 700MHz would be key to its rural 5G in the medium term,” IIFL Securities said in a report.