COAI Urges Government to Cut Spectrum Prices Before Auction Citing Weak 5G Returns

India’s Telecom Operators have sought a reduction in spectrum prices before the next auction, citing high acquisition costs and ongoing financial strain, as per The PTI report.  

The Cellular Operators Association of India (COAI) has said that spectrum payments remain a major capital expense, particularly at a time when returns from recent investments have been limited. 

Large Spectrum Pool Identified 

The Telecom Regulatory Authority of India (TRAI) has proposed auctioning 11,790 MHz of spectrum across bands including 600 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz.  

The reserve price for the entire offering has been estimated at about ₹2.1 lakh crore, around 19% lower than the level recommended during the 2022 auction. 

Lower frequency bands such as 600 MHz are to support coverage and improve connectivity within buildings, which remains a key requirement for network expansion. 

Investment Recovery Remains Slow 

COAI Director General S P Kochhar said telecom companies have committed significant funds towards 5G rollout, but revenue generation has not kept pace.  

He noted that spectrum purchase is only one part of the overall cost, with additional spending required to deploy and maintain networks.  

Until returns begin to improve, further investment at current price levels may remain constrained. 

Debate on Allocation Framework 

The industry body has also raised the need to review the existing spectrum allocation approach. It pointed out that in some markets, spectrum is assigned with defined obligations rather than high upfront payments.  

With 6G development under consideration, operators have indicated that the current model may require changes over time. 

At present, spectrum for satellite communication services is allocated administratively, while mobile services spectrum continues to be auctioned. COAI has approached the government seeking pricing relief until operators begin to recover earlier investments. 

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Conclusion 

The outcome of the auction is expected to depend on pricing decisions, with operators likely to weigh additional purchases against existing financial commitments. 

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