The Telecom Regulatory Authority of India, on 23 June 2025, issued recommendations on the reserve price for radio spectrum across various frequency bands designated for 5G and related services. TRAI has recommended a reduction of approximately 40 per cent from the reserve prices set in the previous spectrum auction, aiming to encourage broader participation by telecom operators and accelerate 5G network expansion across the country.
Background
Spectrum pricing has been a contentious issue in India's telecommunications sector for over a decade. High reserve prices in past auctions — notably the 2022 5G spectrum auction — were criticised for increasing the financial burden on telecom operators, potentially slowing network deployment and ultimately affecting consumer access to advanced connectivity services.
Following the 2022 auction, the Department of Telecommunications referred the matter of spectrum valuation to TRAI for fresh recommendations in light of evolving market conditions, global pricing benchmarks, and the government's objective of achieving widespread 5G coverage. TRAI conducted extensive consultations with industry stakeholders, received counter-comments, and commissioned a comparative study of spectrum pricing approaches in comparable markets including South Korea, Japan, the United Kingdom, and Germany.
The recommendations cover spectrum in the 700 MHz, 3300 MHz, and 26 GHz bands, which form the core of India's 5G deployment strategy — with 700 MHz providing wide-area coverage, 3300 MHz delivering capacity in urban areas, and 26 GHz supporting high-density millimetre-wave applications.
Key Provisions
TRAI's recommendations address the following:
Reserve price reduction: A uniform reduction of approximately 40 per cent in reserve prices across the 700 MHz, 3300 MHz, and 26 GHz bands compared to the 2022 auction prices. The specific recommended per-MHz per-circle prices vary by band and telecom circle.
Payment flexibility: TRAI recommends extending the payment tenure from 20 years to 25 years for successful bidders, with a moratorium of two years on instalment payments to provide operators with capital headroom for network deployment.
Spectrum sharing framework: The recommendations include provisions facilitating spectrum sharing and leasing arrangements between telecom operators, enabling more efficient utilisation of acquired spectrum and reducing effective costs for operators deploying networks in underserved areas.
Surrender provisions: A spectrum surrender mechanism is recommended, allowing operators to return unused spectrum after a minimum holding period of five years, subject to a proportionate surrender charge. This addresses concerns about operators being locked into long-term spectrum commitments for bands that may not yield expected commercial returns.
Implications for Practitioners
These recommendations, if accepted by the government and reflected in the next auction notice, would materially alter the financial projections of telecom operators considering spectrum acquisition. Corporate finance and M&A practitioners advising telecom companies should model the impact of the reduced reserve prices alongside the extended payment tenure on enterprise valuation and capital structure.
The spectrum sharing and leasing provisions create new commercial structuring opportunities. Practitioners advising smaller operators or enterprise-focused telecom service providers should evaluate partnership models that leverage shared spectrum access to enter or expand in specific circles without bearing the full acquisition cost.
The surrender mechanism introduces an exit option that was previously unavailable, reducing the long-term risk profile of spectrum acquisition. However, the five-year minimum holding period and surrender charges must be factored into the cost-benefit analysis. Regulatory affairs teams should track whether the Department of Telecommunications accepts these recommendations in full or modifies key parameters before the auction is announced.