Telecom Lead India: GSMA said that TRAI’s spectrum
auction recommendations will escalate mobile spectrum cost and affect mobile broadband
growth in Indian telecom market.

At present, broadband customer base stands at around 14 million in India. TRAI suggested that the 700 MHz spectrum should be auctioned in 2014. This will affect the mobile broadband expansion plans of major operators such as Bharti Airtel, Vodafone, Tata Teleservices, Idea Cellular, among others.

Telecom equipment vendors such as Ericsson, Nokia Siemens, ZTE, Huawei, Alcatel-Lucent were looking for bagging LTE deals in India. If the government accepts the TRAI recommendations, LTE 4G investments will happen only in 2014-15.

GSMA said its member operators in India have invested
heavily and worked hard to deliver innovative services to consumers.

They are concerned about the TRAI recommendations,
which have the potential to stifle investment in India’s mobile sector. The
GSMA and its members are seeking an open dialogue with the Government of India
on the licensing of the critical spectrum with the aim of finding a solution
that will drive investment and growth in mobile communications and more broadly
in the Indian economy,” said Anne Bouverot, director general, GSMA.

Indian telecom industry indirectly, employs almost
10 million people and serves more than 911 million consumers.

GSMA said TRAI’s proposed reserve prices for
upcoming spectrum auctions are prohibitively high that they will curtail mobile
operator investment in mobile broadband infrastructure and increase prices to
consumers.

Efforts to squeeze money out of mobile operators
for some perceived short-term gain will only reduce investment in networks,
inhibit growth of mobile services and drive up consumer prices limiting the
value the public will derive from the spectrum resource in the long term,” said
Franco Bernabè, chairman of the GSMA and chairman and CEO of Telecom Italia Group.

The European 3G experience more than a decade ago
made clear that auctions designed to maximize revenue, hinders the development
of the mobile sector and the socio-economic benefits that mobile delivers to
the public.

10 percent increase in mobile broadband penetration
delivers $80 billion of extra revenue for India’s transport, healthcare and
education sectors by 2015.

GSMA said TRAI’s recommendations will create artificial
scarcity of this critical resource.

In advance of license renewal, TRAI has proposed to
force current 900 MHz licensees out of the band into the 1800 MHz band. As a
result, TRAI would limit the available spectrum in the upcoming 1800 MHz 2G
auction and leave the remainder under-utilized for a significant period,
creating unnecessary scarcity at a time when India has an opportunity to shape
the future of the mobile industry. This effectively means that billions of US
dollars of investment would be wasted.

editor@telecomlead.com