Before spectrum goes under the hammer, telcos make an urgent plea

The request, which comes ahead of the next spectrum auction likely early next year, reflects persistent concerns among operators that steep reserve prices are stifling investment, leaving valuable airwaves unsold, and ultimately undermining the government’s Digital India vision. Having cheaper airwaves is necessary to free up capital for network infrastructure, the telecom companies said.

“Excessively high reserve prices keep valuable spectrum idle and result in operators facing capacity and capital constraints," Rahul Vatts, chief regulatory officer of Bharti Airtel, stated in a submission to Trai. He said spectrum that remains unsold or underutilized due to inflated pricing is a "direct loss to the country," delaying network expansion and degrading service quality. By reducing costs, operators could redirect capital toward “network densification, faster 5G rollout, and wider rural coverage."

Spectrum represents a critical revenue stream for the government, which sets a base price and expects companies to bid higher. A premium over the reserve price translates into higher government revenue. However, aggressive bidding has eased since 2021, with most of the airwaves sold near reserve prices—a shift driven by industry consolidation, high base prices, and the financial burden of recent 5G rollouts.

Reliance Jio, India's largest telco by market share, urged Trai to recommend a reserve price set at 50% of the spectrum valuation, arguing that the current valuation of 70% is "too steep and not conducive of wider participation." Jio contended that this aggressive pricing prevents genuine price discovery and competition, leading instead to sales at or near the reserve floor.

Validity

Beyond pricing, operators have also called for extending the duration of using spectrum to 30 or 40 years from the current 20 years. They argue that a longer term provides greater policy stability, enhances business viability, and enables the sustained investments required for next-generation network technologies. The Union cabinet had previously approved increasing the tenure to 30 years in 2021 to infuse liquidity, but this was never implemented, with Jio noting that Trai's valuation had simply multiplied the 20-year price by 1.5, negating the intended financial benefit.

The industry's request runs contrary to the public stance of the Department of Telecommunications (DoT). Telecom secretary Neeraj Mittal recently pushed back on the necessity of lower prices.

“I have not seen any TSP come to me saying that they are not using a respective spectrum because its pricing is high," Mittal told reporters last month, questioning how data prices remain low if spectrum acquisition costs are supposedly prohibitive. Mittal maintained that the timing of the next auction would be determined by the "appetite and the demand" among stakeholders. If the reserve prices are so high, how could data prices be so low, Mittal questioned.

Bharti Airtel also said that in future auctions, telcos should be allowed a payment moratorium of six years, followed by 14 equal annual installments. This is because any new network takes a time period of at least 4-5 years to monetize and huge upfront payments combined with short moratorium periods could cause significant financial strain on operators, according to Airtel.

Currently, operators can make full or part upfront payment for the spectrum within 10 days from issuing spectrum. They can also make an upfront payment equal to the installments of at least two years, with the balance payable in equal installments with applicable interest, within the 20-year spectrum holding period. Operators are also allowed to make payment for spectrum in 20 equal annual instalments.

Unsold spectrum

Trai is also looking into concerns raised by the Department of Economic Affairs (DEA), which flagged a lack of effective competition in previous auctions due to industry consolidation and the oversupply of unsold airwaves. The DoT data shows over 12,000 MHz of traditional band spectrum remains unsold. In an effort to mitigate this issue, Trai has sought comments on potentially allowing other entities—such as Internet Service Providers (ISPs) or large connected device network operators—to bid for spectrum alongside wireless carriers.

The telecom carriers uniformly opposed this proposal. Vodafone Idea stated that allowing non-traditional bidders would "impact the robustness of the licensing framework" and create "huge complications related to valuation," arguing it runs counter to the structure of the new Telecommunications Act 2023.

Operators also said that referring to the currently available spectrum inventory as an “over-supply" may not accurately reflect market realities. “Rather, this spectrum should be viewed as strategic reserve capacity intended to address future growth requirements and regional variations in demand," Bharti Airtel said.

A recent analysis by V.J. Christopher, wireless advisor at DoT, flagged that nearly 36% of the spectrum on auction since 2010 was cleared at the base price, and only 15.5% was sold at a premium.

Another grouse relates to the duration of using the spectrum.

Currently, spectrum is issued for a period of 20 years. The Union cabinet in 2021 recommended increasing it to 30 to ensure long-term policy stability, improve business viability, and facilitate sustained investment in advanced technologies. However, the move did not take off. Jio said this should have been implemented in 2022 itself but wasn't, due to what it called Trai’s "aggressive valuation".

While the three carriers agree on the need for cheaper spectrum, they are divided on auctioning some new bands.

Reliance Jio is advocating for a comprehensive release strategy, urging that all nationally and globally identified International Mobile Telecommunications (IMT) bands be auctioned immediately to ensure policy predictability and accelerate 6G readiness. Specifically, Jio wants the entire 6 GHz band to be auctioned now, with payment obligations kicking in only when the full band becomes available in 2030.

Bharti Airtel, is opposed to the plan. The company wants the auction of new bands like 600 MHz and parts of 6 GHz to be deferred for approximately two years. Airtel cited unresolved technical conflicts and the current "early stage" of the device and network ecosystem for both bands, suggesting that a premature auction would lead to underutilization.

The operators also requested the government to relax minimum rollout obligations, designed to ensure the swift deployment of purchased spectrum. Airtel highlighted the difficulty in meeting these commitments for the 26 GHz band, citing limited device compatibility and chipset constraints, and requested an extension to avoid financial penalties. The debate underscores a critical tension between the government’s desire for revenue maximization and the industry’s need for capital efficiency to fund the massive investment required for a true, nationwide 5G transformation.