GSMA weighs in on Indian auction plans

As we reported earlier this week, the Indian government has adopted two measures that could inflate the prices paid for the spectrum. It has limited the supply of UMTS spectrum available, despite assurances from the Ministry of Defence that it could release more; and it has set reserve prices a third higher than those recommended by the independent regulator.

We reported that these measures gave telecoms industry leaders further reasons to be disappointed in new prime minister Narendra Modi’s administration.

And today, mobile association the GSMA has waded into the debate. “While high auction prices may generate short-term revenues for the government, in the longer term they will negatively impact the development of India’s mobile networks and delay investment in infrastructure,” says its chief regulatory officer Tom Phillips.

Investment in India’s telecoms infrastructure is sorely needed: the GSMA’s figures suggest that only 11 per cent of the country’s mobile connections are 3G or 4G. In addition, two fifths of the country’s population don’t even have any 3G coverage.

The GSMA estimates that the mobile industry’s impact on the economy amounted to 5.5 per cent of India’s GDP in 2014 – some $115 billion.

By allowing the auction to go ahead under the terms currently proposed, Modi’s government could be missing an easy opportunity to stimulate investment in India’s economy.

Toby Youell, PolicyTracker

22/1/2015