Telcos Press Trai to Rationalise Spectrum Pricing, Ease Payment Terms

Telecom operators have urged the government to rationalise spectrum pricing and ease payment terms, warning that high reserve prices are discouraging participation and straining the sector’s finances.

The demand was raised at an open-house consultation held by the Telecom Regulatory Authority of India (Trai) on Friday, the Economic Times (ET) reported. Operators said reserve prices for upcoming spectrum auctions should be set at around 50% of the assessed valuation, instead of the current 70–80%. They also cautioned Trai against relying solely on prices discovered in past auctions to determine valuations, particularly when those auctions left large portions of spectrum unsold.

The consultation focused on the auction of radio frequency spectrum across bands identified for International Mobile Telecommunications (IMT). Trai’s spectrum auction recommendations typically follow a three-year cycle, but the government has sought fresh inputs following the completion of the latest cycle, the report noted.

Operators also pressed for more flexible payment terms to improve cash flows and support network expansion. They proposed extending the spectrum assignment period from the current 20 years to 30 or 40 years to allow better cost amortisation and provide long-term operational certainty. Suggestions included a six-year moratorium on payments followed by 14 instalments, or doing away with upfront payments altogether. At present, the government offers a four-year moratorium.

According to an industry review by credit rating agency ICRA, the Indian telecom industry’s total debt is estimated to rise to around ₹6.6 lakh crore as of March 31, 2025. The agency expects operators to spend another ₹3 lakh crore over the next four to five years as capital expenditure, keeping overall debt levels elevated.

Telcos also unanimously rejected concerns over a potential oversupply of spectrum, despite limited demand seen in the 2024 auctions. Reliance Jio, Bharti Airtel and Vodafone Idea said restricting supply creates artificial scarcity and pushes up prices, hurting the industry. They argued that unsold spectrum reflects pricing and ecosystem challenges rather than weak demand, and called for all available spectrum in existing bands to be auctioned promptly to ensure policy certainty and enable network planning.

However, differences emerged over the future of the 6 GHz band. Telecom operators such as Jio and Vodafone Idea said the entire band is critical for 5G expansion and future 6G services and should be auctioned now to encourage ecosystem development.

In contrast, the technology industry, represented by the Broadband India Forum, strongly opposed auctioning the 6 GHz band, arguing that it should be fully delicensed for Wi-Fi use. The group noted that the band has already been delicensed in 84 countries and supports a mature Wi-Fi ecosystem.