The GSMA has issued the Indian government a stern lecture for failing to sell any of its 700-MHz spectrum during its recent spectrum auction, and has called on the government – and all governments everywhere – to reprice it much more cheaply so its operator members can get on with the business of deploying next-gen mobile broadband services across the planet.
GSMA Chief Regulatory Officer John Giusti said in a statement the GSMA has warned that the reserve prices for India’s latest spectrum auction – which fetched $9.9 billion – were set “at an unrealistically high level”, and that no one was likely to buy it at that price (which turned out to be the case).
“High reserve prices inhibit investment or delay deployment in next-generation networks at a time when demand for mobile data is exploding. Regulators should consider the conditions of the local market when setting reserve prices for spectrum auctions,” Giusti said. “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 [ARPU] at $2.45, as of the end of 2015.”
The GSMA is particularly upset because Indian operators won’t be able to use the 700-MHz band – which the GSMA lobbied long and hard to have harmonized as premium global LTE spectrum – for their 4G services. Giusti said that while the successful sale of the 1800 MHz band was good news, “more spectrum will be needed to address the exponential increase in mobile broadband traffic.”
Giusti added that overpriced spectrum isn’t just a problem in India:
“In many markets, mobile operators are struggling to justify the business case for purchasing spectrum at high reserve prices, as proven 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.”
The GSMA says it is urging the Indian government to work with the regulator Trai to recalibrate spectrum pricing for the 700 MHz band.