Telecom Commission decision surprising: GSMA

Global telecom industry body GSMA on Tuesday said that mobile operators in India have to pay significantly more for spectrum compared to other parts of the world even though average revenue per user is significantly lower.

For example, the reserve price set by the Telecom Commission for the 1,800 MHz band in Delhi is, on an average, 70% higher than the reserve prices of the same band in most European auctions in the last three years. High spectrum prices will increase debt ratios, reduce the ability of operators to invest and ultimately, higher long-term costs will translate into higher tariffs for consumers.

"The GSMA was surprised by the Telecom Commission's decision to overrule the TRAI recommendations on reduced reserve prices for the 1800MHz and 900MHz spectrum bands. Given that spectrum blocks remained unsold in previous auctions, we strongly urge the Empowered Group of Ministers to base their final decision regarding spectrum pricing on promoting investment, when they meet in the forthcoming weeks," GSMA said in a statement.

"Setting realistic reserve prices for spectrum auctions will ensure a more efficient use of this scarce resource and, in the longer term, produce much needed economic and social benefits. Our recent report, "Mobile Economy India 2013", found that by 2020, the mobile ecosystem could contribute almost US $400 bn to India's GDP, create 4.1 mn new jobs, and contribute significantly through infrastructure investments (US $9 bn) and public funding (US $34 bn) - if the right polices are in place," said Anne Bouverot, Director General, GSMA.

"We reiterate our call to the Indian Government to focus on creating a supportive environment for telecom investment to continue the success story of mobile in India and ensure that affordable voice and data services are made available to all its citizens," said Bouverot.

Bouverot offered the following statement regarding the Telecom Commission's decision to increase the proposed auction prices by the Telecom Regulatory Authority of India (TRAI) by 25% in key circles for the 1800MHz and 900 MHz spectrum bands.