Whalesbook
TRAI's Spectrum Recommendation
The Telecom Regulatory Authority of India (TRAI) recently proposed auctioning 11,790 MHz of spectrum across various bands. This includes the critical 600 MHz band, which is useful for better indoor coverage. The estimated value for this spectrum is approximately Rs 2.1 lakh crore, marking a nearly 19% reduction from the base price set in the 2022 auction.
Industry's Financial Strain and ROI Concerns
COAI Director General S.P. Kochhar emphasized that spectrum costs represent the largest capital expenditure for telecom operators. He argued that without a clear return on investment (ROI) from 5G services, acquiring more expensive spectrum could threaten business viability. Kochhar noted that many countries offer spectrum at lower costs or even for free, provided operators meet specific service obligations, suggesting India might need to review its approach.
While the government uses administrative allocation for satellite communication services, mobile services still require auction. COAI is seeking government support, or at least cost moderation, until operators can achieve a sustainable ROI from their significant 5G investments. The amount of spectrum operators ultimately acquire will depend directly on these pricing decisions.