New Delhi: The Department of Telecommunications (DoT) has decided to hand over to the state-run Bharat Sanchar Nigam Ltd. (BSNL) to allocate approximately Rs 62,000 worth of spectrum for the rollout of its 5G services by August 2023.
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 DoT committee had approved a proposal, a 10MHz block in the 700MHz premium band worth about Rs40,000 along with 70MHz in the mid-band (3600MHz to 3670MHz) worth about Rs22,000 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 is in addition to the Rs 1.64 lakh crore revival 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 Rs 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. Second-placed Bharti Airtel, on the other hand, is currently using Non-Standalone Mode (NSA) for its 5G network, using spectrum 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.
For this, Bharti Airtel may have to shell out around 40,000 rupees.
Jio was the only telecom company to buy 700MHz spectrum at this year’s auction, paying Rs 39,270 crore for 10MHz nationwide.
Meanwhile, the government is yet to take a call on the mode of 5G rollout by BSNL. The state-owned company is in the final stages to launch 4G services starting next month. Software company Tata Consultancy Services (TCS) will collect the network order, worth Rs 26,821 crore, from the state carrier.
TCS had proposed to deliver all core equipment within 12 months of order, while delivery of radio equipment will be completed over a period of 18 to 24 months. Delivery will be staggered as TCS needs to ramp up production of radios and there is a shortage of chipsets.
Tejas Networks, a unit of Tata Sons, TCS’ parent company, is to manufacture the network equipment for BSNL locally, officials said.