Summary:
India’s telecom operators have urged the government to lower spectrum prices ahead of the next auction, citing weak returns from heavy 5G investments and continued pressure on their finances. Industry body COAI has highlighted that despite billions spent since 2022, monetisation remains slow due to limited use cases and gradual adoption, with revenues not keeping pace with investment levels. While TRAI has proposed auctioning 11,790 MHz of spectrum at a base price of around ₹2.1 lakh crore—lower than the previous auction—operators argue pricing is still high. They have also pointed to global models with more flexible pricing, as the government’s final decision is expected to influence participation and bidding in the upcoming auction.
India’s telecom operators have called on the government to reduce spectrum prices ahead of the upcoming auction, citing limited returns from their substantial investments in 5G.
These concerns arise as policymakers gear up for the next round of spectrum allocation, with operators warning that high reserve prices could place additional pressure on balance sheets already burdened by significant capital expenditure on 5G deployment.
The Cellular Operators Association of India (COAI), representing major telecom companies, has taken up the issue with the government, pointing out that firms have yet to generate meaningful returns from next-generation network investments.
Since the 2022 auction, telecom companies have collectively spent billions of dollars on building 5G infrastructure. However, monetisation has been slow due to evolving use cases and gradual enterprise adoption. The industry notes that revenue growth has not matched the scale of investments, making future spending more sensitive to costs such as spectrum pricing.
Weak 5G returns
Operators have urged the government to consider these factors while setting auction prices, emphasizing that spectrum purchases account for a significant share of telecom capital expenditure.
The matter is particularly important as the Telecom Regulatory Authority of India has proposed auctioning 11,790 MHz of spectrum across multiple bands, including 600 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz.
Lower-frequency bands like 600 MHz are crucial for improving indoor coverage and expanding rural connectivity, while higher-frequency bands support high-speed data services and increased network capacity.
The regulator has set a base price valuing the total spectrum on offer at around ₹2.1 lakh crore, approximately 19% lower than the reserve price recommended for the 2022 auction. Despite this reduction, operators maintain that prices remain high relative to current 5G returns.
Industry representatives have also highlighted international practices where spectrum is priced more affordably or allocated through alternative models, sometimes tied to rollout commitments, suggesting India may need to reassess its strategy as it looks ahead to technologies like 6G.
Meanwhile, the government has adopted a different approach for satellite communications by allocating spectrum administratively rather than via auctions, though auctions continue to be the primary method for mobile services.
The final decision on pricing will significantly influence participation and bidding intensity in the upcoming auction, with operators likely to adjust their purchases based on financial capacity and expected returns, potentially affecting the total spectrum sold.
