Indian telcos' record high spectrum cost burdens may impact national digital goals: GSMA

Time of India

16-05-2025

NEW DELHI: Indian telecom carriers are sagged by one of the highest
spectrum cost burdens
globally, which may impede their ability to invest in the nation's digital connectivity initiatives and related programmes, the
GSMA
and its research unit GSMA Intelligence said.
The high reserve prices have traditionally hindered spectrum sales in India, leading to unsold spectrum and contributing to spectrum scarcity. In other instances, GSMA said that the high reserve prices contributed to higher final prices paid by the telcos.
'However, of late, the approach has been revised, and reserve prices have been reduced to avoid further failures. Simultaneously, already accumulated spectrum cost meant operators were able to pay much less per unit of additional spectrum,' the GSMA said in a report released ahead of the World Telecommunication and Information Society Day 2025.
In India's first
5G
spectrum sale in 2022, the Central government put 72,098MHz of spectrum under the hammer – and sold 51,236MHz (71% of the total) – netting ₹1.50 lakh crore.
Subsequently, about 533.6MHz of unsold spectrum across multiple bands, such as 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300MHz, and 26GHz bands, was put to auction in 2024 to meet the spectrum requirements of telcos and to ensure the continuity of the services. This round, however, saw a muted participation, with only 141.4MHz – or 26.5% of the total – being sold.
GSMA said the lower unit prices in recent spectrum auctions were not 'sufficient to reverse the trend in spectrum coast build-up'.
'The acquisition of new bands to support 5G and improved 4G networks has meant that the spectrum cost burden gradually increased between 2015 and 2023. This currently stands at 26% of operator recurring revenues and is among the highest in the world,' the telco association said in its findings.
GSMA suggested that the rationalised spectrum pricing is one of the catalysts for the recently accelerated 5G rollout and improved network quality in India. 'However, the burden of spectrum cost will continue to influence India's progress towards its digital goals for years to come,' it said.
India's top telecom incumbents,
Reliance Jio
and
Bharti Airtel
, have completed nationwide 5G deployments and are focusing on driving deeper coverage of their mobile networks.
Vodafone Idea
(Vi), too, said recently its commercial 5G services will become available in its priority 17 circles by August 2025.
Meanwhile, state-controlled
Bharat Sanchar Nigam Limited
(
BSNL
) is currently deploying commercial 4G services, and will switch on 5G gradually.
The association said the expansive spectrum acquisition for the latest generation wireless networks has further driven up the aggregate cost burden for the telecom industry.
Globally, the cumulative spectrum costs now account for 7% of operator revenues, a 63% increase over the past 10 years, GSMA found. This has exacerbated the industry's financial woes as the average revenue generated per MHz of spectrum has declined by 60% over the same period.
'Although costs per MHz have fallen by up to 75% in some bands since 2014, operators have increased spectrum holdings by 80% over the same period to cope with bandwidth demand, driving up the overall cost,' it said.
As per GSMA's analysis of spectrum cost on consumer outcomes in the 4G and 5G era, a 10-percentage point (pp) higher spectrum cost-to-revenue ratio leads to coverage that is lower by about 4-pp, and a 10-pp higher spectrum cost means a reduction of download speeds by 6%, and a reduction in upload speeds by 4%.
'Analysis also confirms the vital role of making sufficient spectrum available to enable network rollout: 10% more spectrum leads to 1-pp greater coverage based on 4G networks, and 2-pp greater coverage based on 5G networks. 10% more spectrum leads to 4% higher network download speeds and 2% higher upload speeds. Latencies decline by 1% for every 10% increase in spectrum,' the GSMA said.
'Governments and regulators must prioritise spectrum pricing that reflects market realities and fosters long-term digital growth. By ensuring spectrum is affordable, they can unlock faster network expansion, better service quality, and greater digital inclusion for all of their citizens,' said Vivek Badrinath, director-general of the GSMA.
With nearly 1,000 spectrum licences set to expire worldwide by 2030, upcoming renewals present a critical opportunity to reset pricing policies to drive investment in the next generation of mobile networks, GSMA said.