Policy Pulse #8 | 5G Spectrum Auctioned
Policy Pulse #8 | 5G Spectrum Auctioned
In Focus: 5G Spectrum Auctions
This week has brought us the record breaking auctions for 72 GHz of radio waves in the 5G spectrum which have generated over Rs. 1,49,623 crore in total revenue after 3 days of bidding, with the auction yet to be concluded. With the auction in its final stages, the respective shares of the four bidders contesting - Reliance Jio, Bharti Airtel, Vodafone Idea, and Adani Data Networks – will largely be along expected lines, however, the winning bid amounts have already exceeded expectations.
Drama surrounding the auction began well before the actual sale, with the Cellular Operators Association of India (COAI) - which includes Reliance, Airtel, and Vi as members - opposing the decision to allow Private Captive Networks (PCN) to use the 5G spectrum. COAI alleged there would be ‘no business case’ for commercial 5G networks if PCNs were allowed. However, these concerns now appear unfounded, with the auction revenue already exceeding both the (previous record holding) 2015 4G auction on day 1 itself.
With the entire spectrum being up for sale and only four bidders in the fray, the reserve price set by the government essentially turned out to be the sale price for most bands. The extent to which bidders would compete, and to some extent signaling of intent to other competitors vying for the bands up for sale, began with the submission of Earnest Money Deposit (EMD) by bidders. Reliance Jio led the pack with an EMD of Rs. 14000 crore, Airtel was a distant second with 5,500 crore, followed by Vodafone with 2,200 crore, and lastly, a comparatively measly 100 crore by Adani. Since bidders could bid up to 9x the EMD in the auctions, the EMDs proved a good proxy for estimating bidding strategies.
With bidding activity slowing down at the end of day 3, it appears that Jio picked up the highest priced 700 MHz band - which had gone unsold in two previous attempts in 2016 and 2021. While Vi tried to retain its few remaining strongholds in major cities, the latest, and perhaps the most interesting entrant in the auctions was Adani. While Adani splurged the least out of all bidders, it is possibly cashing in on the higher frequency (26 GHz) bands available. The recently released rules by DoT for setting up private 5G networks allow telecom companies to lease the spectrum to set up private networks. This is potentially Adani’s play in these auctions, as enterprise solutions will account for a significant chunk of the revenues generated via 5G.
As things stand, the Indian telecom market is heading towards a duopoly with Reliance Jio and Bharti Airtel swaying ahead of the pack, and this auction’s results might reinforce these beliefs. The spectrum will be allocated by August 14, and operators will roll out services in major cities by the end of 2022.
Top Stories of the Week
States mandated to procure 25% of energy from renewable sources
The newly released Renewable Purchase Obligation [RPO] mandate will require states to source a quarter of their energy needs through renewable energy sources such as solar, wind, and hydro by the end of this year. The long term trajectory has set the cumulative procurement target to 43% by 2030, with the bulk of the energy coming from solar. Energy storage targets have also been included in the mandate, reaching 4% by the end of the decade. Thus far, only resource rich states such as Gujarat, Karnataka, Rajasthan, Andhra Pradesh and Tamil Nadu have been able to meet their targets. Going forward, the states which miss their procurement targets will now face stiff fines starting from 25 paisa/unit initially and up to 50 paisa/unit in subsequent years.
India, UK sign MoU to on Mutual Recognition of Academic Qualification
On 21 July 2022, a Memorandum of Understanding (MoU) on Mutual Recognition of Academic Qualification was signed between Mr. K. Sanjay Murthy, Secretary (Higher Education), Government of India and Mr. James Bowler, Permanent Secretary, Department of International Trade of the United Kingdom. This is a landmark moment in India-UK bilateral relations and will facilitate smooth movement of students and academics between both countries. It is also expected that this will widen the scope of academic collaboration between Higher Education Institutions of both countries.
Indian Government proposes Health Warning for Tobacco packaging
The Government of India has proposed adding health warnings to tobacco packaging. Under the proposed new requirements, all tobacco and cigarette packets will display either ‘Tobacco causes painful death’ or ‘Tobacco users die younger’. This new regulation, named Cigarettes and other Tobacco Products (Packaging and Labelling) Amendment Rules, 2022, also requires tobacco and cigarette packs to come with a toll-free helpline, Quit Today Call Today (1800-11-2356). The new regulations are scheduled to be implemented from 1 December 2022. Each of the two warning texts is to be accompanied by different pictures. The second warning message with a different set of pictures comes into effect 12 months after the first message.
This Week in Policy
Macroeconomics and Taxation
IMF revises its forecast for the growth of India’s economy to 7.4%, down from its earlier forecast of 8.2%, in view of the Russia-Ukraine war, inflationary pressures and interest rate hikes by the US Fed.
India’s exports to China declined by 31% even as imports rose by 12%, reveals Ministry of Commerce data.
Labour
Karnataka approves the Karnataka Employment Policy 2022-25, which places minimum employment requirements on industries looking to make investments or set up units in the state.
Lead by the Indian Federation of App-based Transport Workers, Swiggy gig workers went on a strike to protest poor pay, reduced incentives and unsafe conditions.
Labour Ministry aborts proposed survey on employment generation by professional establishments.
The Delhi Government has invited an expression of interest from can aggregators to bear 50% of the cost to train women as commercial drivers, in order to boost employment opportunities for women in the transportation sector.
Agriculture and FMCG
India and Mauritius to form an alliance in the field of food security to meet global demand and to address issues like starvation, malnutrition, and associated health problems.
To deal with extreme weather conditions, the Department of Agriculture and Farmers Welfare has issued advisories to the States in consultation with State Agriculture Universities to create an awareness campaign and implement contingency plans as per local needs.
The Tripura Government has signed a Memorandum of Understanding (MoU) with the Northeast Space application Centre (NESAC), shilling, for 21 projects including disaster management and resource mapping.
Ministry of Agriculture and Farmers Welfare plans to hold several programs in the country and abroad to popularize Millets and other nutria-cereals.
Healthcare
In a move to ensure transparency and good governance, the Ministry of Health and Family Welfare has directed all government hospitals to use E-office and maintain all files digitally.
Shri Mansukh Mandaviya, Union Health Minister has launched three schemes to strengthen Micro, Small, and Medium Enterprises (MSMEs) in the pharmaceutical sector. These schemes would facilitate MSMEs in upgrading their technology.
Health Ministry is in the process of finalising ‘Heal in India’, a portal developed under the Ayushman Bharat Digital Mission that is intended to give impetus to medical tourism.
Foreign affairs
India (Trade and Investment) All Party Parliamentary Group established in the UK to promote trade, investment and people-to-people relations with India as part of celebrations of the 75th anniversary of India’s independence
Egypt, India sign MoU to build a green hydrogen factory worth $8 billion in the Suez Canal Economic Zone
Technology, Media and Telecommunications
Department of Telecommunications has floated a new consultation paper on revamping telecom rules to keep pace with new technologies like 5G and also to simplify investments into the sector.
RBI recommends banning cryptocurrencies; however, the government reiterates that it cannot happen without “significant international collaboration”.
International trade and commerce
India, Egypt and 90 other countries have pushed for a fairer trading system at the WTO amid severe food security challenges
India’s imports from China increased by 29% in 5 years: Union Minister of State for Commerce and Industry Anupriya Patel in Parliament
Banking, Finance and Insurance
SEBI notifies framework for the development of a Social Stock Exchange to serve non-profit and for-profit organisations having social intent and impact as their primary goal. See the notification here.
RBI imposes restrictions on four co-op banks due to deteriorating financial conditions; places capping withdrawals for six months.
Manufacturing
The Government has issued 584 Defence Licenses to 358 private companies for setting up manufacturing units to promote ‘Make In India’ in the Defence sector.
The Gujarat government has announced the ‘Gujarat semiconductor Policy 2022-2027’ to attract investments in the chip manufacturing sector.
Central Government invites bids to develop a monkeypox vaccine.
Retail and e-commerce
The Central Government intends to release guidelines to curb fake reviews on e-commerce websites.
The UP government shall form ‘District Export Promotion Councils’ in every district, chaired by the District Magistrate, in order to promote the export of products under the One District One Product (ODOP) scheme. Separately, the UP Government shall organise virtual buyer-seller meetings and showcase ODOP products at international expos under its ‘Local for Global’ scheme.
Logistics
The Indian Chemical Council has signed a memorandum of understanding with Intel India, seeking to assist the chemical industry with the safety and operational efficiency of chemical transport fleets.
In a first, logistics and transportation company Maersk undertakes inland waterway transport of cargo through the Indo-Bangladesh Protocol Route, which connects the riverine systems of the two countries.
NHAI fastag charges, Delhi Government’s environmental compensation cess and the toll tax to be paid to the Municipal Corporation of Delhi shall be integrated into a single RFID tag.
Major ports have been directed to exempt all coastal shipping operations from port and vessel charges for six months.
Sustainability
Lok Sabha passes the Indian Antarctic Bill, 2022 aimed at India’s own national measures for protecting the Antarctic environment and its associated and dependent ecosystem.
Central Consumer Protection Authority issues notices to five EV makers over fire incidents.
Subsidies on the purchase of EVs to be discontinued from July 31 in Goa.
Upcoming Events
EV State Summit Delhi: 2022
July 29 | Radisson Blu Plaza, New Delhi
EMobility+ is organising EV State Summit Delhi 2022 on July 29, 2022 at the Radisson Blu Plaza, Delhi Airport to explore developments in the electric mobility sector and connect stakeholders in the industry. Speakers will cover topics such as EV supply chain development, EV charging infrastructure development, and fleet electrification and mobility as a service. There will also be an exhibition and a buyer-seller meet for participants. More information | Registration Link
ISAS International Conference of South Asia 2022 - 75 Years of Partition: Rupture and Connectivity
August 2-4 | Online
The Institute of South Asian Studies, National University of Singapore is organising a three-day international conference on the partition of the Indian sub-continent 75 years ago and how the geo-political realities of 1947 have an impact on economic integration, infrastructural development and people-to-people connections in the region to this day. More information | Registration Link
Kigali Global Dialogue
August 10-12 | Virtual
Observer Research Foundation, ORF America, and the Ministry of Foreign Affairs and International Cooperation, Rwanda are organising a three-day virtual conference from 10-12 August revolving around themes of Building Resilient Societies; Climate Corollaries; Commerce, Creativity, and Chrome; A Multipolar World: The Geopolitics of Development, and; The Lost Six Million: Lessons from the Pandemic. More information | Registration Link
A Few Good Reads
Read this heartwarming piece about Kaleem Ullah Khan, the father of 300 varieties of mangoes in India.
Abhay Shukla writes in Economic and Political Weekly about novel public health approaches from the COVID-19 pandemic with a focus on experiences from Maharashtra.
Akash Karmakar in a well-penned opinion piece in The Print talks about how non-intervention and not governmental monitoring is the way to promote internet safety in India.
A full-page infographic in The Hindu explains why the rupee is under pressure.
Noah Smith explores the dire economic situation of Pakistan.
Tweets of the Week
PM Modi greets the CRPF on its Raising Day:
Milan Vaishnav highlights concerns with the functioning of India's legislative assemblies:
On a lighter note, USAID Administrator Samantha Power gets a cricket lesson in New Delhi:
Key Notifications
ONGC inks MoU with Greenko ZeroC to produce green hydrogen and other derivatives (such as Green Ammonia) of Green Hydrogen for a period of two years.
Smt. Smita Jhingran has been appointed as a full-time member of the National Financial Reporting Authority.
The Government formally notifies the assumption of the office of President by Smt. Draupadi Murmu.
In a rejig of Gujarat’s bureaucracy, Harshadkumar Patel appointed as Commissioner of Relief and ex-Officio Secretary, Revenue Department, and K.M. Bhimjiyani appointed as Secretary, Agriculture, Farmer’s Welfare and Cooperation Department.