GSMA Comments on Telecom Commission's Recommendations on Spectrum Pricing

LONDON, Nov. 12, 2013 /PRNewswire/ -- Anne Bouverot, Director General, GSMA, offered the following statement regarding the Telecom Commission's decision to increase the proposed auction prices by the Telecom Regulatory Authority of India (TRAI) by 25 per cent in key circles for the 1800MHz and 900 MHz spectrum bands:

"The GSMA was surprised by the Telecom Commission's decision to overrule the TRAI recommendations on reduced reserve prices for the 1800MHz and 900MHz spectrum bands. Given that spectrum blocks remained unsold in previous auctions, we strongly urge the Empowered Group of Ministers to base their final decision regarding spectrum pricing on promoting investment, when they meet in the forthcoming weeks.

"Mobile operators in India have to pay significantly more for spectrum than in other parts of the world even though average revenue per user is significantly lower. For example, the reserve price set by the Telecom Commission for the 1800 MHz band in Delhi is, on average, 70 per cent higher than the reserve prices of the same band in most European auctions in the last three years⁽¹⁾. High spectrum prices will increase debt ratios, reduce the ability of operators to invest and ultimately, higher long-term costs will translate into higher tariffs for consumers.

"Setting realistic reserve prices for spectrum auctions will ensure a more efficient use of this scarce resource and, in the longer term, produce much needed economic and social benefits. Our recent report, "Mobile Economy India 2013", found that by 2020, the mobile ecosystem could contribute almost US $400 billion to India's GDP, create 4.1 million new jobs, and contribute significantly through infrastructure investments (US $9 billion) and public funding (US $34 billion) – if the right polices are in place.

"We reiterate our call to the Indian Government to focus on creating a supportive environment for telecoms investment to continue the success story of mobile in India and ensure that affordable voice and data services are made available to all its citizens."

Notes to Editors 
⁽¹⁾ The comparison is purchasing power parity adjusted and includes the following countries: Denmark, Germany, Netherlands, Portugal, Romania and Switzerland.

About the GSMA 
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo. 

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.