GSMA cautions over high price, low availability of 3G airwaves

Steep reserve prices coupled with limited amount of 3G spectrum availability may hurt the outcome of the upcoming auction and could also be disadvantageous for India's citizens, Tom Phillips, chief regulatory officer, GSMA said.

GSMA is the global body for all the GSM telecom operators.

"The GSMA is concerned by the action of the Telecom Commission to increase reserve prices for India's 2100MHz spectrum auction next month - almost 36 percent higher than those recommended by the Telecom Regulatory Authority of India (TRAI)," he said here Thursday in a statement.

"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," Phillips added.

He said 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.

The Indian government is yet to take a final call on the reserve price of the 3G spectrum.

"It is well documented that mobile broadband has the potential to deliver substantial socioeconomic benefits," Phillips said.

According to GSMA Intelligence, in 2014 alone, the overall economic impact of mobile technology in India amounted to approximately $115 billion in value-added terms, representing an economic contribution of around 5.5 percent of the country's gross domestic product 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 reached 61 percent of India's population and it is set to escalate substantially to 90 per cent by 2020," he said.

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 2020.

"However, the GSMA cautions that these forecasts will only become reality if mobile operators have the capacity to make the necessary network investment in India. We hope that the Indian government will set realistic prices for next month's auctions to maximise long-term economic and social gains," Phillips added.