According to GSMA Intelligence, Indian telecom operators are burdened with some of the highest spectrum costs globally, potentially hampering their ability to invest in digital connectivity and infrastructure development. The report warned that elevated reserve prices have historically resulted in unsold spectrum and inflated final bidding costs, creating a supply-demand mismatch.
As per the report, India’s first 5G spectrum auction in 2022 saw 72,098 MHz up for sale, with 71 per cent sold for Rs 1.5 trillion. However, the 2024 follow-up auction for 533.6 MHz of unsold spectrum across various bands witnessed limited interest, with only 26.5 per cent being acquired. Despite marginally lower prices in recent auctions, GSMA said the reduction was insufficient to reverse the long-term accumulation of spectrum costs.
Globally, spectrum expenses now constitute 7 per cent of telecom operator revenues, a 63 per cent rise over the past decade, while revenue per MHz has declined by 60 per cent. GSMA highlighted that for every 10 per cent-point increase in spectrum cost-to-revenue ratio, network coverage drops by 4 per cent points, download speeds decline by 6 per cent, and upload speeds by 4 per cent.
The report credited rationalised pricing for India’s improved 5G rollout pace and network quality. However, it also noted that continued aggressive pricing threatens to slow momentum. With nearly 1,000 spectrum licences set to expire globally by 2030, GSMA urged policymakers to use renewals as an opportunity to implement more sustainable spectrum pricing frameworks to enable broader network investments and better consumer outcomes.
