DoT auctions Rs 17.23 lakh cr spectrum, sells only Rs 5.64 lakh cr with 32.7% efficiency

The Department of Telecommunications (DoT) put spectrum worth Rs 17.23 lakh crore (at reserve price) under auction from 2010-2024 but managed to sell worth only Rs 5.64 lakh crore, leaving airwaves worth nearly Rs 11.6 lakh crore unsold, an overall revenue efficiency of 32.7%.

As per an analysis done by the DoT’s wireless advisor VJ Christopher, of all spectrum auctions, strong proceeds from the high value 3G auction in 2010 may have inflated expectations, leading to overly optimistic revenue projections in subsequent auctions.

The analysis, titled ‘The diminishing returns of SMRA (simultaneous multiple round auction): A data driven analysis of India’s spectrum sales (2010-2024)’, said high reserve prices have acted as ceilings, leading to persistent unsold inventory and opportunity losses in both revenue and consumer welfare.


To be sure, the reserve price of spectrum is recommended by Telecom Regulatory Authority of India (Trai) and the DoT mostly accepts the pricing.

“The initial auction years were defined by a land-rush mentality. With numerous operators competing for limited 3G and 4G spectrum, the market was intensely competitive,” the report said.

The 2010 auction was a landmark success, with the winning price to reserve price (WP/RP) ratio reaching 5.34, indicating bidders paid more than five times the reserve price. The fierce competition, driven by a market with nine to 10 active bidders, ensured high revenue and efficient price discovery.

The high growth era continued till 2015 with limited availability of spectrum and competition among players. But the market dynamics shifted dramatically after 2016, driven by market consolidation and shift from scarcity to sufficiency.

Till 2015, there used to be eight bidders in action, but that changed in 2016 when there were seven and in subsequent auctions, there were only three bidders, barring 2022, when there were four bidders. Adani Group had participated in the 5G auction in 2022 along with the three private telecom operators – Reliance Jio, Bharti Airtel and Vodafone Idea.

“Since 2016, the WP/RP ratio has flatlined at 1.0. The reserve price is no longer a floor for bidding but has become the fixed sale price,” said the report.

From 2010-2024, there were 818 spectrum offerings across nine auctions for multiple frequency bands across 22 service areas. Nearly half (48.8%) of the offerings attracted no buyers. Of the remainder, 15.5% sold at a premium above the reserve price, while 35.8% cleared at the base price. “These figures suggest that for almost half the offerings, reserve prices were set too high to attract demand, and for another third, they were high enough to suppress competition,” the analysis found.

The report said there is a need to recalibrate the reserve price mechanism and adopt a market-aligned approach that reflects operator financial capacity, sectoral demand trends and macroeconomic condition.

“Lower, market-driven reserve prices can stimulate competition, improve sell-through, and paradoxically generate higher total revenue than inflated benchmarks with limited buyer interest,” it said.

The study found that the high revenue in the 2022 auction was not the result of a revival of competition but of the introduction of new, high-value 5G bands. “Crucially, even this essential spectrum was sold almost entirely at the base reserve price, reinforcing the argument that the reserve prices were set at the market's maximum tolerance level, leaving no room for competitive bidding,” the report said.

Among other recommendations, the report said re-auctioning of unsold spectrum should be allowed at recalibrated reserve prices instead of repeatedly carrying forward unsold inventory. Operators should be provided with a forward-looking plan for spectrum release schedules for the next five to 10 years , it said.