Telecom Body Urges Govt to Lower Spectrum Prices, Cites No Return on 5G Investment: Report

Why It Matters

Reduced spectrum costs could improve telecom operators’ cash flow, accelerate 5G rollout, and sustain low‑cost data for consumers, while shaping the regulatory framework for future 6G deployments.

Key Takeaways

• COAI asks government to cut spectrum base price before auction
• Operators have yet to recover billions spent on 5G infrastructure
• TRAI set base price Rs 2.1 lakh crore, 19% below 2022
• High spectrum costs could limit operator participation in upcoming auction
• 6G horizon pushes need for a new spectrum allocation model

Pulse Analysis

India’s telecom market has poured unprecedented capital into 5G networks, yet operators report little to no return on investment. The country’s Digital India programme has driven data prices to among the lowest globally, but the high upfront cost of spectrum remains a financial strain. Analysts note that without a pricing adjustment, carriers may delay network upgrades, potentially slowing the rollout of advanced services that could boost digital inclusion and economic growth.

The upcoming spectrum auction, overseen by the Telecom Regulatory Authority of India (TRAI), proposes a base price of Rs 2.1 lakh crore—about 19% lower than the 2022 reserve. While the reduction signals government sensitivity to industry concerns, COAI stresses that even the revised figure could deter participation if operators cannot justify the expense against delayed ROI. A lower price could free up capital for expanding coverage, especially in lower‑frequency bands that improve indoor connectivity, and may encourage competitive pricing for consumers.

Looking ahead, the industry is already eyeing 6G, prompting calls for a more flexible spectrum allocation model. COAI argues that the current auction‑based approach, inherited from 5G, may not suit the rapid evolution of future wireless technologies. Policymakers face the challenge of balancing fiscal revenue with the need to sustain investment, foster innovation, and maintain India’s reputation for affordable mobile data. A revised framework could involve shared spectrum, dynamic pricing, or administrative allocations to ensure long‑term sector resilience.