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Lobby group calls on regulator to focus on long-term societal benefits rather than short-term financial gain.
The GSMA on Tuesday expressed dismay at India’s reserve price for 700-MHz spectrum, warning that it could put off potential bidders.
According to the lobby group, the Telecom Regulatory Authority of India (TRAI) has recommended a price of US$1.7 billion per MHz of nationwide 700-MHz spectrum. The frequencies are due to be auctioned this summer along with airwaves in the 800-MHz, 900-MHz, 1800-MHz, 2.1-GHz, 2.3-GHz and 2.5-GHz bands.
The auction is expected to raise significantly more than the 1.09 trillion rupees ($16.03 billion) generated by India’s most recent multi-band auction that ended in March 2015.
"We respectfully ask the Indian government and TRAI to keep in mind the objectives for releasing 700-MHz spectrum – one of the most promising bands to expand the reach of mobile broadband services into rural areas – in the lead-up to auctioning this critical spectrum resource," said John Giusti, chief regulatory officer at the GSMA, in a statement.
The GSMA said monthly ARPU in India is among the lowest in the world, standing at $2.45 at the end of 2015.
"Combined with so far limited revenue contribution from data services, competitive pressure on operators’ revenues and high capital expenditure to upgrade networks, this makes it more challenging for operators to recover from high spectrum prices," Giusti said.
He went so far as to warn the TRAI that such a high reserve price could dissuade operators from bidding on 700-MHz spectrum altogether, noting that "a valuable portion" of 700-MHz spectrum was left unsold in Australia for the same reason.
"As the digital economy becomes increasingly important to India’s future prosperity, we encourage greater focus on the long-term benefits of connecting more people in India to affordable mobile broadband, rather than on short-term financial gain," Giusti said.
