Telcom body COAI seeks new spectrum pricing model, cites unsustainable costs and policy gaps

COAI has maintained that operators’ ability to invest depends on their financial capacity.

The Cellular Operators Association of India (COAI) has urged the government to reform the spectrum allocation and pricing regime, warning that the current auction-driven model, combined with high input costs, poses a threat to the financial sustainability of the telecom sector.

The association, which represents Reliance Jio, Bharti Airtel and Vodafone Idea along with a broader telecom ecosystem, stressed that spectrum pricing should align with present-day market realities, not legacy revenue expectations, and highlighted the need for broader policy reforms,  including resolution of AGR issues, licence fees, and GST-related refunds, to bridge existing revenue gaps.

Speaking to Moneycontrol, COAI Director General SP Kochhar said while India’s telecom industry continues to expand high-quality connectivity nationwide, policy reforms are essential to ensure its long-term financial health.

“The current method of auctions has been designed more for vertical spaces in telecom. But now, with telecom becoming a horizontal enabler, a new algorithm has to be designed by the government and by TRAI to take this into account — that this is a foundational sector. If the foundation is not strong, it is not good for the nation. Forget about the profits of private telcos; it will not be good for the nation as a whole,” Kochhar said.

He added that spectrum pricing must reflect “present-day realities” rather than legacy expectations of high revenue from auctions.

“This also indirectly shows that we are short of the revenue we require, and that gap has to be addressed through policy reforms such as AGR, which is still not fully resolved, along with issues related to the licence fee, spectrum costs, GST reversals, and refunds of accumulated input tax credit,” he said.

Kochhar stressed that these financial and regulatory issues must be tackled together to improve the sector’s overall financial health. “If it improves, we will go ahead and buy more spectrum in anticipation that new use cases will emerge,” he said.

COAI has maintained that operators’ ability to invest depends on their financial capacity.

“6G is progressing well, but just imagine…if use cases do not come up, we cannot continue investing thousands and thousands of crores of rupees without having clear use cases in mind. This is something that both the government and the industry must work on together…that is how networks will evolve,” Kochhar said.

He added that telecom service providers remain committed to delivering the best services to citizens, which is why rollouts have continued without interruption.

Tariffs among the world’s lowest; operators cautious on hikes

On India’s ultra-low mobile data rates, Kochhar said the government’s stance of tariff forbearance — allowing market forces to decide prices — is appropriate. However, he pointed out that the industry faces a fine balance between affordability and sustainability.

“Data tariffs in India are about Rs 9 per GB,  among the lowest in the world. They remain low because of volumes. As coverage and tele-density grow, consumption rises, and volumes may keep tariffs low. But at the same time, infrastructure costs are increasing, and that’s something operators have to balance,” Kochhar said.

He added that operators are unlikely to raise tariffs “just for the sake of it,” and any increase would only come after all other options have been exhausted.

COAI renews ‘fair share’ demand from OTTs

Reiterating a long-standing industry concern, Kochhar said large traffic generators (LTGs) — primarily global OTT platforms — should contribute to the cost of building and maintaining network infrastructure.

“These companies gain huge profits riding on telco infrastructure but contribute nothing. If they start contributing, rollouts will be faster and quality will improve…it will be good for both sides,” he said.

According to COAI, OTTs account for 70–80% of total data traffic on telecom networks but make no financial contribution toward network upkeep.

Private 5G networks unnecessary in India, says COAI

On the debate around private 5G networks, Kochhar argued that India’s extensive telecom coverage and the capabilities of 5G technologies such as network slicing and edge computing, make standalone private networks largely redundant, except in niche use cases.

“There is no place in India without some form of telecom connectivity. With 5G, slicing and edge computing, private network needs can be met within telco networks. Setting up private networks will only eat into telcos’ revenues,” he said.

Kochhar added that private 5G networks may make sense only in specialized environments like mines or offshore refineries, but not in most industrial or enterprise contexts.