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

The Cellular Operators Association of India (COAI) has reportedly urged the Indian government to reduce spectrum base prices ahead of the upcoming auction, citing that telecom service providers have yet to recover their huge investments made in 5G infrastructure. The appeal comes as operators continue to face delayed returns on their capital-intensive deployments.

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Massive 5G Investments Yet to Deliver Returns

Speaking to PTI on the sidelines of the COAI Digicom Summit, COAI Director General S P Kochhar reportedly highlighted that the industry expects the government to consider the humongous investment made by telecom operators in 5G, without any return on investment (ROI).

“I hope that the spectrum prices go down because 5G has seen a lot of capital infusion without ROI. Till the time we start getting ROI, investing in a very expensive spectrum will have to be judged as a cost-effective business purpose. A spectrum cannot be just used by picking it up from the auction, but it has to be made usable with large investments,” Kochhar reportedly said.

TRAI Recommends Auction of 11,790 MHz Spectrum

In February, the Telecom Regulatory Authority of India (TRAI) recommended auctioning the entire 11,790 MHz of available spectrum across multiple frequency bands, including 600 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz and 26 GHz. Lower frequency bands, such as 600 MHz, are known to offer wider coverage and improved indoor connectivity, and the government is exploring their auction to enhance network reach.

Pricing to Decide Operator Participation

TRAI has pegged the base price of the proposed spectrum at Rs 2.1 lakh crore, marking a 19 per cent reduction compared to the reserve prices set for the 2022 auction. However, Kochhar noted that pricing will ultimately determine the extent of participation by telecom operators.

6G on the Horizon

“We want more spectrum. There are many countries where the spectrum is free, but there are obligations for that spectrum. So the model has to evolve now, with 5G having come in and 6G on the horizon. The model has to be different from the one which we are following. That is a call the government has to take,” he was quoted as saying.

High Spectrum Costs Remain a Major Concern

While the government has opted to allocate spectrum administratively for satellite communication services, spectrum for mobile services continues to be assigned through auctions. Kochhar reiterated the industry’s concerns over high costs, stating, “We have been writing to the government that the spectrum cost is the biggest capital expenditure that we incur. They have to at least hold a hand till the time we start getting ROI on the use of spectrum.”

India Offers cheapest mobile data

Despite no ROI on 5G, India offers one of the cheapest mobile data in the world. The Government of India’s flagship Digital India programme, launched in July 2015, has significantly transformed the country’s digital landscape by expanding internet access, improving affordability, and strengthening digital infrastructure, according to information presented in Lok Sabha in March.