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GSMA voices criticism of Indian licensing proposals

The Indian regulator’s plans to impose a high opening bid in the upcoming 2G spectrum auctions have drawn criticism from the GSMA. The reserve prices will be substantially higher than they were during the 2008 licensing process, in which licences were significantly undervalued.

The trade association has stated that the Telecom Regulatory Authority of India (TRAI)’s proposals “disregard international best practice in spectrum policy and jeopardise the investment of billions of US dollars in new mobile infrastructure.”

Under TRAI’s proposals, a nationwide 1800MHz licence would merit an opening bid of INR36.22 billion (US$689.6 million) – around ten times as much as the reserve price for the same spectrum during the 2008 process.

In February this year, India’s Supreme Court cancelled 122 of the underpriced 2G licences issued in 2008, claiming that the “totally arbitrary and unconstitutional” issuing process squandered vast amounts of potential revenue for the Indian government.

Another of TRAI’s proposals would push licensees that currently hold spectrum in the 900MHz band into the 1800MHz band. This has also come under fire from the GSMA, with chairman Franco Bernabè claiming: “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.”

GSMA director general Anne Bouverot added: “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.”

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