What is Spectrum Auction? Know all about spectrum, bands and why an auction is conducted
Why in News?
Various telecom companies such as Reliance Jio, Bharti Airtel and Vodafone Idea have participated in the pre-bid conference conducted in regard to the spectrum auctions. The telecom department had asked all the telecommunication firms, telcos, to submit their pre-written queries about the rules and processes by January 15.
The word spectrum gained popularity in 2010-11 when India reported its biggest scam called 2G Spectrum Scam. Various politicians were associated with this case and many were arrested.
Since then people gained massive interests in the spectrum and its auctions. Take a look at the article below to study this topic in detail.
What is Spectrum?
- Spectrum is a range of radio waves used for communication purposes. It would include FM and AM radio broadcasts too and WiFi or Bluetooth.
- With Spectrum come frequency. Frequency is the number of repetitions of the wave that one can see in a period.
- This means is a wave repeat slowly, it is low frequency and if it repeats more times in a period, it would be referred to as high frequency.
- Thus spectrum refers to the waves that surround us and can pass through anything. This means it needs to be regulated also which is why they are divided into bands.
- If left at any frequency, there would be a complete chaos and the interference would be amplified. Thus band division is helpful.
- Telecom spectrum starts from 800MHz and goes up to 2300 MHz.
- The radio channels are spread between 100-200 MegaHertz.
- WiFi used 2.4 GHz earlier and shifted to 5 GHz now.
- Most commonly we use 800 MHz, 900 MHz, 1800 MHz, 2100 MHz and 2300 MHz in cellular communication.
This is why various standards like GSM, WCDMA and LTE were developed over time to use these bands.
The spectrum system is used by every country and also the same technology is used around the world which is how we have roaming services.
How and Why is a spectrum divided?
Just as various countries manage their spectrums the cities have their telecom circles. This way the Government gets to manage its spectrum more effectively. Presently India is divided into 22 circles.
Telecom operators are now asked to pay separately for various frequencies and they can renew their licences. Earlier, the spectrum was linked to each operators licence.
So any telecommunication company will be required to place a bid for the spectrum license in all of these circles to offer access across India. If not, it would be required to connect with another company to offer the services in areas where it does not own any spectrum, which lead to roaming charges.
What is 2G, 3G and 4G?
This refers to the generation of technology used for communication. The oldest of the three is 2G while the 4G is still being developed. These are technologies that are developed to take advantage of various bands.
There is a reason why your phone requires a modem. This is because, with it, the phone can connect to various frequencies to give you uninterrupted services.
Earlier in India, 2G services were launched at 900MHz and later 1800MHz, which is also being used for 4G while 3G services ran on both 900MHz and 2100MHz.
The advantages of different bands come from the amount of energy used for each of them. The higher the frequency of the wave, the more the energy is required by it. This holds validity for any kind of spectrum like the telecom spectrum.
Lower frequencies are likely to use lesser power, travel far, not get affected by disturbances, and provide better coverage inside buildings.
This means that one would likely operate at the lowest frequency that can carry signals necessary for his applications. 1800MHz is considered to be the best frequency for coverage and capacity for 4G deployment.
Spectrum Auction: Explained
Just like natural resources are divided for their fair use, the spectrum is also required to be auctioned by the government. The government auctions it to those companies that can use it to offer several services and recoup their investments.
The first spectrum auction in India was conducted for 900MHz band, in 1994. Just after this MTNL and BSNL entered into the picture, and there were auctions in 1997, 2000, and 2001 (the last being for 1800MHz).
Later, the government switched to an administrative allocation model, where it would select the companies best suited for developing India's telecom infrastructure. However, the result of this was that the spectrum was being licensed at far lower rates than what was raised by auction.
Then came the 2G spectrum scam and the Supreme Court asked the government to cancel all those licenses that were citing irregularities.