GSMA wants govt to revisit 700 MHz spectrum band pricing

The debt-ridden telecom sector ignored premium airwaves in 700 MHz band at a reserve price of Rs 11,485 cr per MHz

Global mobile industry body GSMA on Thursday called upon the government to reconsider pricing of 700 MHz band that failed to find takers in the just-concluded auction due to its "unrealistically" high price.

In a statement, John Giusti, Chief Regulatory Officer, GSMA, also urged the government to reassess the approach to spectrum auction reserve prices after India "failed" to sell any of the critical 700 MHz band last week.

"GSMA is concerned that, after the Indian auction, none of the 700 MHz band can be used to expand mobile broadband coverage to Indian citizens. As we had cautioned, the spectrum went unsold because the reserve prices for this highly sought-after band were set at an unrealistically high level of more than $60 billion (over Rs 4 lakh crore)," it said.

GSMA added that high reserve prices inhibit investment or delay deployment in next-generation networks at a time when demand for mobile data is growing manifold.

"Regulators should consider the conditions of the local market while setting reserve prices for spectrum auctions. In India, mobile operators have been asked to pay some of the highest rates for spectrum compared to other markets even though it has a low average revenue per user...," it added.

Urging the Indian government to work with the regulator to recalibrate spectrum pricing for the 700 MHz band, GSMA said that timely deployment of this spectrum will expand the reach of mobile broadband services and deliver positive social and economic benefits to the country's citizens, creating a truly digital India.

The industry body termed the successful sale of licences in the 1800 MHz band "a step in the right direction".

"We are confident that this 1800 MHz spectrum will help operators improve coverage gaps, but more spectrum will be needed to address the exponential increase in mobile broadband traffic," said the group.

GSMA noted that in many markets, mobile operators are struggling to justify the business case for purchasing spectrum at high reserve prices, as proved in India, as well as in the 700 MHz auctions in Australia and Senegal.

"This hurts consumers by delaying deployment in this critical spectrum, when there is already a vibrant global ecosystem in the 700 MHz band with over 100 LTE networks launched worldwide, supported by 469 devices," it added.

In the spectrum auction that concluded last week in India, seven telecom companies made commitments of Rs 65,789 crore for buying 964.80 MHz of spectrum in various frequency bands against 2,354.55 MHz airwaves put on the block.

Even at the end of the five-day auction, nearly 60 per cent of the spectrum remained unsold, including the expensive 700 MHz band, which found no buyers.

The debt-ridden telecom sector ignored premium airwaves in 700 MHz band -- which was put up for sale for the first time -- at a reserve or base price of Rs 11,485 crore per MHz.