Optimising 5G Spectrum Trading in India, Unlocking Future Connectivity

Optimising 5G Spectrum Trading in India, Unlocking Future Connectivity

Why in News?

As India accelerates its 5G rollout, improving the spectrum trading and sharing mechanisms is becoming essential. The recent move by Adani Data Networks to acquire 400 MHz of 5G spectrum in the 26 GHz band signals rising interest in private networks. This has renewed focus on auction efficiency, pricing reforms, and the promotion of Captive Non-Public Networks (CNPNs).

Introduction

India’s digital growth depends on effective 5G deployment. But much of its spectrum remains underutilised due to flawed auction designs and outdated trading norms. Optimising the way spectrum is allocated, traded, and shared—especially high-frequency bands like 26 GHz—can transform industries, reduce costs, and fuel innovations like IoT, automation, and smart infrastructure.

Key Developments and Issues

1. Private Networks and Spectrum Use

   • Adani Data Networks (ADNL) plans to build 5G-based private networks using 400 MHz in the 26 GHz band.

   • The 26 GHz band is suited for enterprise-level, short-range applications—like smart factories and automation.

2. Current Trading Limitations

   • Existing rules allow spectrum trading and leasing only between licensed operators, not private networks.

   • A significant portion of high-frequency spectrum remains unsold and under-used.

3. Consolidation and Market Share

   • Two major players—Bharti Airtel and Reliance Jio—hold about 70% of India’s total spectrum, which is comparable to other mature telecom markets.

   • Airtel holds 22,538 MHz and Jio holds 24,712 MHz, reflecting growing consolidation.

4. Auction Methodology Gaps

   • India uses a “Simultaneous Multiple Round Ascending Auction (SMRA)” model.

   • However, when prices go above reserve levels, operators often don’t return unneeded spectrum—leading to inefficiencies.

5. Promoting Captive Networks (CNPNs)

   • CNPNs can enable enterprises to lease or acquire spectrum for their own operations.

   • The DoT guidelines issued in May 2022 allow telecom and IT providers to set up CNPNs, but execution remains slow.

   • Clear pricing and allocation models for CNPNs are still evolving.

5 Key Takeaways

1. Adani’s spectrum move reflects the rising interest in private 5G networks for industrial use, beyond traditional telecom operators.

2. Current auction and pricing rules often result in unsold spectrum or locked-in holdings, leading to underutilisation.

3. Airtel and Jio dominate the spectrum market, but this mirrors global trends where top players hold most bandwidth.

4. Captive networks (CNPNs) are key to enabling 5G use in sectors like manufacturing, energy, and logistics—but need clearer pathways for access.

5. Regulatory upgrades in auction design, spectrum sharing, and CNPN frameworks can unlock the true potential of 5G in India.

Challenges and the Way Forward

Challenges:

• Inefficiency in auctions leads to unsold spectrum.

• No provisions for spectrum trading by private or non-telecom entities.

• Lack of dynamic pricing or returns mechanism for unused spectrum.

• Ambiguity around CNPN setup and leasing guidelines.

Way Forward:

• Revise auction rules to better match demand, including spectrum return clauses.

• Allow CNPNs to lease or purchase spectrum directly from the government or telecom players.

• Encourage secondary spectrum trading markets.

• Create a clear policy and pricing roadmap for CNPNs with fair, transparent guidelines.

Conclusion

India’s 5G journey will succeed only if spectrum resources are efficiently allocated and shared. Reforms in trading, leasing, and auction methods—alongside promotion of CNPNs—can help India not just deploy 5G widely, but innovate with it. The future of smart factories, real-time automation, and high-speed industrial applications depends on getting this spectrum strategy right.

Q&A Section

1. What is the significance of Adani Data Networks acquiring 5G spectrum?
Adani’s move indicates rising demand for private 5G networks that support enterprise applications like automation, rather than public telecom services.

2. Why is the 26 GHz band important for 5G in India?
It is suitable for short-range, high-capacity applications like smart manufacturing, warehouses, and campus networks due to its high-frequency nature.

3. What’s wrong with the current auction methodology?
India uses the SMRA model, which can lead to unsold or unused spectrum if prices go too high, with no mechanism for operators to return excess spectrum.

4. What are Captive Non-Public Networks (CNPNs)?
CNPNs allow enterprises to run private 5G networks for internal operations. DoT’s 2022 guidelines allow setting up CNPNs, but access to spectrum is still unclear and underused.

5. What policy changes are needed to optimise 5G spectrum use?
India should update trading/sharing rules, allow CNPNs to lease spectrum, create secondary trading markets, and revise auction mechanisms for better efficiency.