The Centre must urgently reassess its spectrum selling policy in light of recent auctions where operators showed limited interest in purchasing airwaves. Less than 2 per cent of the offered spectrum was sold, resulting in the Centre achieving only 12 per cent of its revenue target. In most circles, there was no competitive bidding, allowing operators to acquire spectrum at the reserve price. Additionally, operators avoided bidding on 5G spectrum, such as the 3300MHz/26GHz bands, citing unmonetised investments from previous acquisitions.
Airtel and Vodafone Idea focused mainly on renewing airwaves in regions where their twenty-year rights are coming to an end, while Reliance Jio confined its bids to specific areas like Bihar and West Bengal, spending less than ₹1,000 crore compared to ₹88,000 crore in the previous auction. With telecom companies burdened by a collective debt of ₹6.4-lakh crore, there’s a reluctance to engage in aggressive bidding wars for spectrum. The lack of viable 5G use cases further complicates matters, while budget-conscious consumers opt for unlimited data plans, affecting revenue streams. This auction highlights a shift: operators are no longer rushing to accumulate spectrum at high costs, signaling a change in how this resource is perceived. Spectrum, once considered scarce, is now abundant. The Centre’s auction offered over 10,500 MHz, sufficient for all operators to provide quality services for the next two decades. Notably, the government avoided creating artificial scarcity to stimulate demand, a commendable approach.
Looking ahead, three critical steps should guide the telecom sector’s growth. Firstly, the Centre should abandon annual spectrum auctions, opting instead for a centralised platform where spectrum can be procured on demand. Transparency should be upheld through public disclosures of spectrum availability and competitive bidding when multiple entities express interest. Moreover, the evolution towards a demand-driven spectrum allocation system would align with global best practices, fostering efficiency and competitiveness in India’s telecom market. By eliminating the rigid annual auction cycle, operators can better strategise their spectrum acquisitions, optimising network deployments and service offerings based on actual needs rather than speculative forecasts.
Secondly, spectrum pricing must be re-evaluated. Spectrum auctions conducted by the Centre since 2010 have been largely unsuccessful due to the high reserve price fixed by the telecom regulator. The existing auction mechanism often fails to reflect market value, as evidenced by bids rarely exceeding reserve prices. Lastly, operators must pivot towards innovation to enhance customer experiences. While their current monetisation strategy revolves largely around increasing tariffs, mobile service providers should explore new 5G applications that add value to users’ lives. As broadband networks expand, operators should emulate companies like Google and Meta, leveraging mobile infrastructure to generate significant revenues through consumer-centric services.