Last week India concluded the much-awaited 5G auctions. In this auction, airwaves in various 4G and 5G bands were offered for sale. A total of 51.27 GHz (71.06 per cent) got sold at the total price of ₹1.5-lakh crore. This collection was the highest when compared with all spectrum auctions held since 2010.

The auction was conducted with the utmost professionalism, blended with transparency and openness — the mandatory prerequisites needed for driving such outcomes.


For the success of a mega event like the current 5G auctions, elaborate planning and preparations are required. These include finding an adequate quantum of airwaves so that there are no shortages. In order to fulfil this objective, the government went through the following steps.

Firstly, identifying the airwaves suitable for India, to ensure the availability of equipment at an affordable price. Secondly, refarming these spectrum bands from defence and agencies, so that enough spectrum is available for sale. Thirdly, defining rules of coordination (simultaneously working) of these spectrum bands among commercial and government agencies (where complete refarming was not possible).

It took 2-3 years of extensive preparation, and the results speak for themselves — a total of 72 GHz of airwaves was released and offered for sale mostly in the 5G bands. Never in the past, has such an effort been undertaken to clear the airwaves in a coordinated and planned manner.

The next objective was to prepare the industry so that the bidders are financially ready to participate in such a mega auction. This was triggered by the telecom reforms of November 2021. These reforms were aimed at easing the cash flow situation of the industry which was already reeling under heavy debt.

As a part of the reforms, the government eased the auction’s payment terms. This it did by allowing the bidders an option to pay the full auction amount in easy yearly instalments. The government also eradicated the spectrum usage charges (SUC) for the spectrum sold in this auction. SUC is paid by the operators as a percentage of their annual revenue.

Before this auction, the rate of SUC was in the range of 3-4.5 per cent, and as a consequence of the telecom reforms, this rate got reduced drastically. This led to more cash in the hands of the bidders — for spectrum acquisition, equipment procurement, and infrastructure deployment.

Apart from these, many other items were included in the reform package, like rationalisation of the definition of Adjusted Gross Revenue (AGR), no increment SUC on spectrum sharing, relaxed FDI, etc. All of these have greatly eased the financial conditions of the bidders and prepared them well, not only for this auction but also for making robust investments in the 5G networks.


The most important part of the execution was the TRAI’s improved strategy of arriving at the “reserve price”. Compared to the past, this time, TRAI decided to call the spectrum price “market-determined” only when all the spectrum offered in a circle got sold (in the preceding auction) and nothing was left unsold. This is quite unlike the past, when spectrum was called as “market-determined” even when a fraction of it got sold.

This prevented 99.9 per cent of the prices (that emanated out of the March 2021 auction) from becoming candidates for escalations — at least by a factor of approximately 10 per cent — as they did not get qualified as “market-determined”. Hence for these circles, the TRAI used ground-up pricing models to determine their valuation and then pegged the final reserve price as 70 per cent of this number, instead of 80 per cent —a typical factor used in all such cases in the past. This helped in driving the prices down.

After completion of this process, the DoT took just three-and-a-half months to complete the auction. DoT, within this short window of time, had to identify the auctioneer, extract an additional quantum of airwaves wherever possible, harmonise it, and then execute the 5G auction.

Way forward

Though the 5G auction can be regarded as a reasonable success, there are plenty of opportunities for improvements. The first is to ensure that all the Indian operators are at par with their global counterparts on airwaves in all 5G bands (low/mid/high freq). Why? Without sufficient airwaves in all bands, one simply cannot deploy efficient 5G networks and will have to continue to rely on legacy 4G for reach and coverage.

Also, such dependence on 4G will prevent us from unlocking many powerful features of 5G like network slicing, etc. If we pick operators in key global markets for evaluation, then India stands out behind in low freq 5G bands (<1GHz), compared to the US at 1.21 MHz/PoP in Cr, and Canada at 10.52 MHz/PoP in Cr (Source GSA).

This leads us to the next important point — that is, to alter the approach for determining reserve prices. This is to make the prices more realistic and not become a barrier to entry. This can be achieved by delinking prices of 5G bands from the valuation of the 4G 1800 MHz band (the earlier approach used by the TRAI).

Also, any distortion in auction prices for a specific circle needs to be ironed out by applying appropriate weights to the pan India aggregated number. This weight can be the GDP of the individual circles or any other appropriate metric. This correction will help smoothen the abnormally escalated prices of some circles, where the bidders bid to establish competitive supremacy or protect their business from unwinding. Many such incidences were witnessed in the past.

One such event is the 2015 auction, where in the 900 MHz band, the prices in UP(E), UP(W) and Rajasthan went higher than that of Delhi and Mumbai.

Working on the above lines will also open opportunities for reducing auction prices further, thereby enabling the operators to grab more spectrum in all 5G bands. This will preserve market competitiveness and help in improving the quality and reach of 5G connectivity in India. Only then can the national objective of Antyodaya — of serving the un-served and connecting the unconnected — be fulfilled.

Therefore, unless we work towards making airwaves more affordable and accessible to the operators, the vision of digital and financial inclusion will remain an unfinished task.

The writer is Vice President, Government Affairs, Qualcomm, India & South Asia

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