An empty spectrum auction tells India where to look for the cost of coverage

India can own useful spectrum and still fail to find a bidder for it. In 2022, the government offered 40 MHz of paired 600 MHz spectrum and received no bids in the band. TRAI revisited that experience in its February 2026 auction recommendations. The temptation is to explain the result through one number, the reserve price. A bidder is also buying into an equipment ecosystem and a network plan. The next offer should be designed around the value of actually operating the band. TRAI, 24 February IMT spectrum recommendations · TRAI, February recommendations summary

What spectrum can replace

Lower frequencies generally travel further under comparable conditions and can be useful for covering territory or reaching inside buildings. Their commercial value depends on the capacity required, the radios and antennas that operators can source, and the phones that customers already use. A licence may make it possible to reach a village from an existing mast. If most customers’ handsets cannot use the band, the coverage gain arrives gradually with device replacement. In dense districts where capacity rather than geographic reach is scarce, another band or additional sites could have more value.

An operator already holding usable low-band frequencies will bid on the incremental benefit. A rival with a different portfolio might value the same licence more highly. In both cases the spectrum price interacts with capital available for network construction. A costly acquisition can absorb funds that would otherwise buy additional sites or better backhaul. The published reserve and the way payments are scheduled are consequently part of a deployment decision.

Why bids disappear

Take a simplified circle in which a new band is expected to save ₹50 crore in present-value network construction and bring ₹30 crore in additional customer contribution. Suppose compatible radio equipment and integration cost ₹35 crore more than the alternative. The bidder can pay up to ₹45 crore before its incremental value turns negative. If slow handset adoption halves the extra contribution, that falls to ₹30 crore. At a reserve of ₹40 crore the same physical band clears in the first scenario and attracts no bid in the second. No engineering property has changed.

The public also has an option to wait. If device availability is expected to broaden, the band can become easier to deploy. Waiting has a cost in places that could benefit immediately, and uncertainty itself can delay orders for equipment. A calendar for reassessment can reduce this cost. An early limited award can also create learning, though a tiny award that cannot justify vendor investment could deliver an ambiguous result.

The public value of reaching the margin

The case for a high reserve is that scarce public resources should earn a fair return and bidders can understate their valuations. The counterweight is that social value extends beyond expected subscriber contribution. Better indoor coverage, fewer trips to find a signal and easier access to public services can matter even in an area where an operator expects low revenue per customer. That gap can justify geographically measurable obligations or competitive support for coverage. A lower reserve without a deployment incentive could simply transfer rents to incumbents.

A useful test would estimate the incremental cost per newly covered location and the share of existing devices able to use the band, by service area. Published obligations should focus on actual availability and measurable service at the edge of a coverage area. Comparing deployment with alternative low-band upgrades or shared towers would make it possible to identify when this frequency is the least-cost route to better access.

TRAI’s revisit is valuable because it treats the band’s market as something that can change. A stronger device ecosystem or verifiable coverage gains would support moving faster. If demand remains thin even where equipment is available and reserve prices reflect plausible costs, the better use of public effort may be to buy coverage by another route.