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GSMA lauds Telecom Commission for increasing spectrum in 2G auction

The GSM Association, a worldwide body of GSM equipment makers and mobile operators, welcomed the government’s decision to release double the amount of 2G spectrum than was recommended by the Telecom Regulatory Authority of India (TRAI).

The telecom commission, a top body in the department of telecommunications (DoT) had, on Thursday, decided to provide at least 10 MHz of 2G spectrum in the upcoming auction. TRAI had suggested auctioning 5 to 7.5 MHz, arguing that the remaining spectrum be kept for the needs of operators whose licenses will soon expire.

When the licenses of operators like Airtel and Vodafone expire in the coming years, TRAI had said, they should be given spectrum in the 1800 MHz (2G band) and the current spectrum that they have been given should be taken back.

TRAI had pointed out that most of the old operators are currently using more valuable 900 MHz spectrum for their 2G services, and that this spectrum can be put to better use for wireless broadband services such as 4G LTE. As such, it had recommended giving only a small portion of the total available 2G spectrum in the upcoming auction.

The Telecom Commission, however, wants 10 MHz (in chunks of 1.25 MHz each) to be auctioned, later this year.

Most operators are keen to buy spectrum and were up in arms against TRAI’s recommendation that most of the spectrum be kept for later use in ‘refarming’. The Telecom Commission, however, did not lower the reserve or minimum price of the 2G spectrum auction. TRAI had suggested keeping prices at the same level as 3G, while allowing companies who buy the spectrum in the auction to deploy any service, including 3G and 4G, on it. TRAI’s reserve price was about 9 times the price charged by the government when A Raja allotted spectrum in early 2008.

Predictably, the GSMA welcomed the move to allow more spectrum in the auction, but was ‘disappointed’ by the Commission not asking for a cut in reserve prices.

“This decision is a first step in the right direction for the Indian people and economy, but is insufficient to meet the rising demand for mobile services over the long term and is still at a lower level than what is currently available,” the Association said in a statement.

A final decision on the reserve price of the spectrum will be taken by a group of ministers headed by Pranab Mukherjee.

“The GSMA is greatly concerned that the Telecom Commission has not made a decision to reduce the high reserve price levels recommended by the TRAI. If the prices remain the same, they present a major disincentive to future investment in India and will threaten the country’s leadership in mobile technology. The GSMA also believes that spectrum usage charges should be kept at a minimum,” it said.

“To ensure that India’s spectrum policy meets the demands of society both now and in the future, we urgently call on the TRAI and the members of the Empowered Group of Ministers to listen to the advice given by business leaders, economists and the mobile industry, in setting a fair price for new spectrum, before making a final decision,” said Anne Bouverot, Director General of the GSMA.

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