GSMA calls for major rethink of India’s reserve price mechanism, warns against “oversupply” narrative

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The global telco body, GSMA, has urged the Telecom Regulatory Authority of India (TRAI) to adopt a forward-looking and market-aligned approach for upcoming spectrum auctions, warning that the real challenge facing India’s telecom industry is not “oversupply” but high reserve prices that have deterred participation and delayed network rollouts.

In its detailed response to TRAI’s consultation on auctioning spectrum for International Mobile Telecommunications (IMT), the global industry body stated that India’s spectrum policy should prioritise enabling affordable, high-quality connectivity over maximising short-term fiscal revenues.

“The notion of oversupply is misplaced; the real challenge is pricing and affordability of spectrum,” GSMA said, adding that the high reserve prices in past auctions have led to large swathes of unsold spectrum and constrained operators’ ability to invest in network infrastructure.

Citing data from the Department of Telecommunications’ own study “The Diminishing Returns of SMRA: A Data-driven Analysis of India’s Spectrum Sales (2010–2024)”, the GSMA noted that only about 32.7% of the spectrum offered during that period was sold, leaving nearly ₹11.6 lakh crore worth of spectrum unsold. “This unsold spectrum represents a massive opportunity cost of prioritising fiscal revenue over efficient allocation,” the industry body said.

Calls for recalibrated reserve prices

The GSMA called for a major rethink of India’s reserve price mechanism, arguing that the current system—based on indexed historical prices—has effectively turned the reserve price into the final selling price, undermining the process of true market-based price discovery.

“Indexing to a historical price fails to account for the declining real value per MHz,” GSMA said, pointing out that while data usage has grown exponentially, average revenue per GB has dropped by 96% over the past decade. “The reserve price should be set substantially below the expected market value, serving only as an administrative tool to discourage frivolous bids.”

According to GSMA Intelligence data, India’s spectrum cost burden is among the highest in the world, at roughly 26% of operator recurring revenues—limiting the capital available for 5G and upcoming 6G expansion.

Full release of spectrum, not restricted supply

The GSMA has urged TRAI and the Department of Telecommunications to auction the entire available spectrum across all IMT bands—including 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz—in the next auction. Withholding supply, it warned, “creates artificial scarcity, inflates prices, and reduces consumer welfare.”

The industry body also recommended that India adopt a clear long-term spectrum roadmap aligned with its 6G vision. It backed auctioning the upcoming 600 MHz and upper 6 GHz bands (6425–7125 MHz) in large contiguous blocks, noting that these bands will be crucial for rural coverage and urban capacity expansion.

“The 600 MHz band will be India’s next nationwide coverage layer, delivering deep rural reach and indoor penetration,” GSMA said, while emphasising that the upper 6 GHz band “is essential for 6G evolution and low-latency industrial applications.”

Critique of fiscal approach and call for reform

The GSMA recommended that spectrum valuation and pricing be driven by long-term socio-economic benefits rather than short-term revenue goals. “The highest value of spectrum is realised through its efficient use and timely deployment, not by maximising auction receipts,” it said.

Among its main recommendations, the GSMA has called for reserve prices to be set well below estimated market values to ensure that spectrum is fully sold and to stimulate fresh investment in networks. It said that reserve prices should function only as a safeguard against speculative bidding, not as a revenue-maximising tool. The industry body also urged the regulator to adopt a market-based valuation framework that reflects operators’ actual revenue potential and the broader economic capacity of the Indian market.

The GSMA further suggested extending the validity of spectrum licences from the current 20 years to 30–40 years, arguing that longer tenures would give telecom operators greater financial stability and help them secure funding for large-scale network investments. It also recommended that India maintain its existing globally harmonised band plans under 3GPP standards to ensure device compatibility, reduce refarming costs, and accelerate deployment of 5G and future 6G networks.

Global economic benefits at stake

Quoting a GSMA–Coleago study, the submission said releasing the full 6 GHz band for licensed mobile use could add up to USD 610 billion to global GDP, with full-power licensed IMT delivering up to seven times more economic benefit than shared or unlicensed models.

“India’s spectrum roadmap must prioritise fully licensed IMT use, avoid mixed-mode sharing, and provide clear coexistence rules for satellite services,” GSMA said, warning that uncertainty in allocation frameworks could dampen investor confidence and slow down the country’s digital progress.