GSM Association warns of impact of hike in spectrum reserve price

The GSM Association (GSMA), which represents global mobile operators, is concerned by the Telecom Commission's move to increase the reserve price for 2100 MHz spectrum that is being auctioned in February.

The reserve price is almost 36-per cent higher than what was recommended by the Indian telecom regulator, the Telecom Regulatory Authority of India (TRAI).

''Moreover, the proposal by the Government to only put 2x5MHz of spectrum in the 2100MHz band up for auction, versus GSMA and TRAI recommendations to auction at least 2x20MHz of the band, risks further distorting the outcome of the auction to the disadvantage of India's citizens,'' said Tom Phillips, chief regulatory officer, GSMA.

''While high auction prices may generate short-term revenues for the government, in the longer term they will negatively impact the development of India's mobile networks and delay investment in infrastructure, resulting in higher retail prices and an inferior mobile experience for consumers,'' he added.

Mobile broadband has the potential to deliver substantial socio-economic benefits, the representative body said.

According to GSMA Intelligence, in 2014 alone, the overall economic impact of mobile technology in India amounted to about $115 billion in value-added terms, representing an economic contribution of around 5.5 per cent of the country's GDP last year.

Looking ahead, mobile broadband is set to grow exponentially throughout India, driving digital inclusion and economic growth for India's consumers and businesses.

By the end of 2014, 3G coverage had reached 61 per cent of India's population and is set to escalate substantially to 90 per cent by 2020. Similarly, while 3G and 4G connections only represented 11 per cent of all mobile connections by Q4 2014, this will increase almost four-fold to 41 per cent by 20201.

However, these forecasts will only become reality if mobile operators have the capacity to make the necessary network investment in India, it cautioned.