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Fixing Appropriate Reserve Prices for 5G Radio Spectrum
This article analyses the spectrum-winning bid prices in simultaneous multiple round ascending auction held across the world for 700 MHz and indicates how it had an impact on the winning bid prices in other countries. It also analyses the spectrum prices of the mid-band (3.3–3.6 GHz) and the millimetre wave band (26 GHz) that are essential for the rollout of 5G services and makes a similar remark on reserve prices. Based on the analysis, it predicts the possible outcome in the forthcoming spectrum auction.
The author acknowledges DotEcon for sharing the spectrum database for academic purposes.
The fifth-generation (5G) communication services are being rolled out worldwide with 135 commercial launches covering about 235 million subscribers. It is estimated that 5G services will cover 3 billion users by 2025. Apart from the popular views about 5G providing high-speed data transfers, it is more about bringing a paradigm shift in ways in which things and humans are interconnected. The McKinsey Global Institute (MGI 2020) has estimated an increase in global gross domestic product (GDP) by about $2 trillion through the use of the 5G connectivity paradigm in key sectors such as healthcare, retail, mobility, and manufacturing alone.
In India, we have made remarkable inroads by covering close to 800 million subscribers with 4G network services. In order to cover the rest of the population, including rural areas with 4G/5G, it is imperative that the government make every effort to sell the radio spectrum, which is a critical resource in the forthcoming auctions. Since radio spectrum cannot be stored for future use, it is important to make effective and efficient use of it. By not being able to utilise about 1,200 megahertz (MHz) of the 700 MHz spectrum since 2016, we have lost a huge value of this scarce resource.
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