5G spectrum auction: Why the 700-MHz band is on telcos' bandwidth

The 700-megahertz (MHz) spectrum band — widely used by telecommunication companies (telcos) in the West for a cost-efficient deployment of the 5G technology — has gained traction among telcos in India.

If in the previous airwave auction the band found no takers, why is it now crucial to 5G roll-out?

It is believed that Reliance Jio, which is rumoured to have won 10 MHz in the band across the country, could well have a clear edge over its rivals in the 5G sweepstakes. However, it was not sold in the last two auctions due to a very high base price, brought down again by 40 per cent this time round.

Communications Minister Ashwini Vaishnaw on Wednesday said that the 700-MHz band will help provide connectivity in far-flung rural/congested areas across the country.   
 

Globally, the consensus is that the 700-MHz band will play a pivotal role in delivering 5G service — more so for companies like Jio, which will kick off with the more advanced standalone 5G network (where both the core and radio are 5G-powered). That explains why the European Union has declared it a ‘pioneer band’ for 5G, alongside the 3.5-gigahertz (GHz) and 26-GHz bands — both of which were auctioned in India.

The reason for this ‘premium’ status is simple.

High-frequency millimetre bands like 26 GHz provide huge bandwidth and consequently speed, but not coverage. The mid-band (3.5 GHz) can offer faster speeds than 4G, but its coverage is also limited and more towers need to be installed for it to be effective.

The problem of coverage, however, is resolved with the 700-MHz band owing to its many inherent advantages like wide coverage, low frequency, and better building penetration. It offers coverage of a 100-kilometre (km) radius, compared to a mid-band that will not be more than 1-3 km. It, therefore, requires fewer towers and is cost-effective.

It is 5x more efficient, compared to the 1800 MHz for rural area coverage, and twice as efficient as 900 MHz.

It is significantly cheaper to provide broadband services in 700 MHz than in the 2100 MHz band, which is almost 70 per cent expensive.

A premium choice for telcos, it possesses the ability to pierce walls, support Internet of Things, and unlock potential in latency-sensitive services like telemedicine, autonomous driving, and online gaming. In many countries — Germany, in particular — it is being used to extend coverage in rural areas with 5G over a larger area with fewer towers.

Critics say there are more options in the lower band, where investment in the network for the band has already been made. For instance, 800 MHz is far more sensible and cost-effective to buy more in this band and use it for 5G coverage. Some telcos point out that in India, the 900 MHz band is already being used by incumbents for 2G and 3G services. So is the 800 MHz band, which, say analysts, is in the case of Jio — half of it is used for 4G.   

The 700-MHz band is fast catching up as the preferred choice for 5G. There is enough telecommunication equipment (radios) and choices, and prices will continue to fall. For instance, China Mobile last year announced it had planned to acquire 400,000 700-MHz-powered base stations in partnership with the Broadcasting Corporation of China. Such deals will clearly bring in economies of scale.  

According to the data from the Global Mobile Suppliers Association, about 165 operators have been identified as investing in the 700-MHz spectrum — for both long-term evolution and the 5G network. There are already over 20 operators that have launched the 5G network using this spectrum range. Many telcos like Deutsche Telekom (announced in June this year) and Vodafone are using the 700-MHz band for the first time to offer 5G services in Europe.    

   

The 700-MHz band also supports standalone 5G networks, in which the network, as well as the core, is powered by 5G.

Standalone 5G has many advantages — it offers efficient network slicing (customised spectrum for enterprises), lower latency supporting myriad applications from remote surgery to machine-to-machine applications, and provides many ways for monetisation. Except for Jio, its rivals will be using the non-standalone 5G network where the core will still be on 4G. 

Why the 700-MHz band is premium?

• Considered a key band, alongside 3.5 GHz and the millimetre band for efficient 5G roll-out
• Provides 5G coverage, which means fewer towers are required which mid-bands do not offer
• Also good for indoor coverage and roll-out in rural India
• Globally, it is a popular band for 5G, especially with a big push in China