No issue with spectrum pricing, next auction depends on telcos' appetite: Telecom secretary

No telecom service provider (TSP) has approached the government with concerns over the high reserve prices for spectrum, Neeraj Mittal, telecom secretary, said on Thursday.

India’s low data tariffs suggest that spectrum pricing is not a significant issue, he added.

“I have not seen any TSP come to me saying that they are not using a respective spectrum because its pricing is high,” Mittal said while speaking to reporters on the sidelines of the India Mobile Congress 2025, adding that if the reserve prices are too high, how our data prices are too low.

He also said the next spectrum auction will depend on the appetite and the demand. "We will discuss with TSPs and everyone else who is supposed to use the spectrum and figure that out,” he added.

His comments on the spectrum reserve price assume significance because, since 2016, spectrum has been largely sold at not much more than the reserve price set by the government.

However, this became even clearer in the last two auctions, in 2022 and 2024, indicating low demand for spectrum. This led the department of economic affairs (DEA) to flag a lack of effective competition in the sector that could lead to further poor auction outcomes.

The government sets a base or reserve price for the spectrum and expects companies to bid higher. A premium over the reserve price translates into a higher government revenue.

No premium

A recent analysis by V.J. Christopher, wireless advisor at the department of telecommunications (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.

“Operators aren’t complaining (of high spectrum prices) because most key spectrum bands are already cornered and competition has thinned. But silence doesn’t mean affordability—it only means there’s no incentive to buy more,” said Parag Kar, an independent telecom analyst.

Low data tariffs don’t prove spectrum is cheap; they simply reflect a price-sensitive market where raising tariffs would only shrink revenues, Kar added.

The government must ensure that low-frequency bands, such as 600, 800, and 900MHz, are not left idle but are utilized to improve service quality, which currently lags far behind that of global peers, he said

The Telecom Regulatory Authority of India (Trai) is working on the contours of the next spectrum auction and has already issued a consultation paper.

To address the concerns raised by the DEA and enhance competition, Trai suggested opening up auctions to a wider range of service providers. Currently, only access service providers (like Jio, Airtel, and Vodafone) can participate.

“There's a science behind the numbers that sets the reserve price. Our goal has to be, on the one hand, to maximize revenue potential for the government for that resource, but also be able to provide a raw material at a competitive price that will still be a benefit to end consumers,” Jyotiraditya Scindia, Union telecom minister, said in a press conference on Thursday.

It is not right to look at the last spectrum auction of 2024, where the spectrum was sold at the reserve price, he said. “The particular auction where it was sold at the reserve price was on the back of a huge amount of 5G spectrum that was sold at very high prices (in the 2022 auction),” Scindia said, adding that the demand, therefore, was not there in terms of competitive or premium pricing.

To be sure, in 2022, a total of 72,097.85MHz of spectrum worth ₹1.5 trillion in the 700, 800, 900, 1,800, 2,100, 2,500, 3,300MHz, and 26 GHz bands was auctioned. This was the highest proceeds for the government from the auctions so far.

After skipping auctions in 2023, the government collected ₹11,340.78 crore in the 2024 auction—the third-lowest amount since competitive bidding began in 2010. The government had put up 10,523.2MHz of spectrum worth ₹96,320 crore on sale, but managed to find buyers for just about 1.3% of the total radio frequencies on offer.

In September 2021, the Union Cabinet approved conducting spectrum auctions in the last quarter of every fiscal year.

Caller name display

Besides the spectrum auction, a key consideration is the rollout of the Calling Name Presentation (CNAP) service. The service, once rolled out, will enable users to see the caller's name on their smartphone screens, providing clarity on genuine calls.

Operators have sought clarity from the DoT on which names they should display. This is because there may be family or business connections associated with one know-your-customer (KYC) registered name, but the connection is being used by someone else within the family or business.

When asked about the challenge, Mittal said it is better to display at least one KYC-registered name than nothing.