Steep Reserve Price May Impact Spectrum Auction: GSMA

Following the Indian telecom regulator's recommendations on spectrum reserve pricing, the global association of telecom players feels the prices are on a higher side and may impact participation of companies in auction of airwaves.

"The GSMA is very concerned over Trai's (Telecom Regulatory Authority of India) recommendation to set a starting price of $1.7 billion (roughly Rs. 11,556 crores) per MHz for pan-Indian 700 MHz spectrum. India has one of the lowest average revenues per user across the world ($2.45 at the end of 2015)," GSMA chief regulatory officer John Giusti said.

"High reserve prices and an unrealistic pre-determination of spectrum value could also reduce the willingness of potential bidders to buy the spectrum," he added.

The Trai recommended a reserve price of Rs. 1,595 crores for 700 MHz in the Delhi circle.

"In Australia, an unrealistically high reserve price resulted in a valuable portion of the 700 MHz spectrum left unsold and unused. Unused or under-utilised spectrum benefits neither the economy nor society," the global association of telecom players said.

It said more the mobile operators pay for a spectrum licence, less the capital available to roll out new mobile networks.

"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," he said.