Telecom Spectrum Auction

Subject: Science & tech

Section: IT

Context- Why are telecom companies upset with the regulator despite its proposal to cut prices by 40%?

Concept-

The story so far:

The Telecom Regulatory Authority of India (TRAI) this week released recommendations on auction of spectrum, including those likely to be used for oﬀering 5G services.
The telecom regulator has suggested cutting prices of airwaves across various bands by 35-40% from its earlier proposed base price.
However, the Cellular Operators Association of India, whose members include the three private telcos, Bharti Airtel, Reliance Jio and Vodafone Idea, has expressed disappointment, given the industry’s demand for a 90% reduction in the prices.

What is Spectrum?

Spectrum refers to the invisible radio frequencies that wireless signals travel over.
Those signals are what enable us to make calls from our mobile devices, tag our friends on Instagram, call an Uber, pull up directions to a destination, and do everything on our mobile devices.
The frequencies we use for wireless are only a portion of what is called the electromagnetic spectrum.
Portions of electromagnetic spectrum are grouped in “bands” depending on their wavelengths—the distance over which the wave’s shape repeats.
The full electromagnetic spectrum ranges from three Hz (extremely low frequency) to 300 EHz (gamma rays).
The portion used for wireless communication sits within that space and ranges from about 20 KHz to 300 GHz.
When we talk about radio spectrum, we are talking about the range of radio frequencies that are used for communicating.

Telecom spectrum auction

How Does Spectrum Work?

Because a range of spectrum frequencies can be used for cellular communications, different bands have slightly different characteristics.
For the purposes of wireless communication, we can think of spectrum in three categories: low-, mid-, and high-band spectrum.
- Low-band spectrum (under 3 GHz) travels longer distances with minimal signal interruption. Today’s wireless networks are built primarily on low-band spectrum, and the wireless industry has used this spectrum to build high-speed wireless networks.
- High-band spectrum (above 24 GHz) travels much shorter distances—think meters, not miles—compared to low-band spectrum, but offers high capacity and ultra-fast speeds.
- Mid-band spectrum (between 3 and 24 GHz) blends the characteristics of both low- and high-band spectrum—providing a mix of coverage and capacity.

Spectrum Auction:

A spectrum auction is a process whereby a government uses an auction system to sell the rights to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources.
In India, the Department of Telecommunications (DoT) conducts auctions of licenses for electromagnetic spectrum.
India was among the early adopters of spectrum auctions beginning auctions in 1994.

TRAI:

The Telecom Regulatory Authority of India (TRAI) was established on 20th February, 1997 by the Telecom Regulatory Authority of India Act, 1997.
Objectives of TRAI:
- TRAI’s mission is to create and nurture conditions for growth of telecommunications in the country.
- TRAI regulates telecom services including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government.
- It also aims to provide a fair and transparent policy environment which promotes a level playing field and facilitates fair competition.
Headquarters: The head office of the Telecom Regulatory Authority of India (TRAI) is located at New Delhi.
The function of the TRAI is to make recommendations on the following matters:
- Need for introduction of new service provider.
- Revocation of license for non-compliance of terms and conditions of licence.
- Measures to facilitate competition and promote efficiency in the operation of telecommunication services to facilitate their growth.
- Technological improvements in the services provided by the service providers.