The GSMA has urged the Indian government not to set prices for an upcoming spectrum auction higher than those recommended by regulators.
Telecom regulator TRAI has recommended reducing the reserve prices for spectrum in the 1800-MHz and 900-MHz bands by as much as 60% in some circles, compared to the prices used in unsuccessful previous attempts to re-auction the spectrum freed by the cancellation of 122 2G licenses in 2010.
But the Telecom Commission recently decided to overrule TRAI and increase the proposed prices by as much as 25% in key circles. The final pricing decision will be made by an Empowered Group of Ministers in the next few weeks.
In a statement, GSMA director general Anne Bouverot said the body was “ surprised by the Telecom Commission’s decision to overrule the TRAI recommendations ... given that spectrum blocks remained unsold in previous auctions.”
She pointed out that Indian mobile operators have to pay significantly more for spectrum than most of the world, even though they have some of the lowest ARPU in the world.
“For example, the reserve price set by the Telecom Commission for the 1800-MHz band in Delhi is, on average, 70% higher than the reserve prices of the same band in most European auctions in the last three years.”
But the opposition Bharatiya Janata Party has a very different view, Times News Networkreported. Its leader has written to the Prime Minister demanding it reject TRAI's pricing recommendations, on the grounds that it would cause a potential loss to the government of up to 350 billion rupees ($5.53 billion).
The letter insists that despite TRAI's view, the Indian telecom sector is healthy and growing robustly.