The global mobile operators association GSMA, has found India’s revised and lowered rates of 2G spectrum to be too high with the GSMA Director General Anne Bouverot describing the new prices as “still prohibitive”.
Telecom Regulatory Authority of India (TRAI) had originally fixed the prices at about INR 32.66 billion / MHz which would have translated to a massive INR180 billion (US$3.2 billion) for a pan India 5MHz license. Though to the relief of the telecom operators in India the Empowered Group of Ministers (EGoM) deemed the prices too high and suggested a reduction of the prices for the same.
Unfortunately, the EGoM has recommended a base price of between INR140 billion to INR160 billion (US$2.5 billion to US$2.9 billion) which is a marginal decrease from the original prices fixed by TRAI and as such still remain exorbitant as per the GSMA. Above that the operators might be required to pay an additional spectrum usage charge of about 3-8 % above the license fee.
Though, TRAI has tried to reduce the burden of payment of payments on the operators by allowing them pay only 35% for GSM and 25% for CDMA upfront and pay the rest in installments.
GSMA Director is of the opinion that the rates are very high and as such will put pressure on the operators which might translate into high costs for the users or compromise on the delivery quality and might even affect the offering of affordable and innovative mobile services. She has appealed to the EGoM and TRAI to reconsider the prices in the best interest of the economy and the people.
The local operators also do not seem to be very pleased with the developments and have indicated that they might end up incurring huge debts and as such would be forced to pass on the burden to their users resulting in increased prices for them.
The new licenses awarded via auctions will replace those cancelled by the Supreme Court of India recently which ended up upsetting a lot of foreign operators. The auctions are scheduled to begin by 31st of August this year.
