Ensure adequate availability of 2G spectrum in auction: GSM body to govt

NEE DELHI: A global industry lobby representing mobile phone companies using the GSM technology has said that India must ensure adequate airwaves are available for sale in the upcoming auctions to reflect its 'correct value' and cautioned against designing the bidding process to maximise revenues.

"The Indian government should not design auctions of new spectrum purely on the basis of maximising revenues from the process... This would be a mistake," GSMA's chief government and regulatory affairs officer Tom Phillips said. He said that higher cost for acquiring spectrum could result in reduced investments after the auctions as seen in the European market in the early part of the last decade.

"I don't think any of India's operators are keen to pay huge prices for the initial spectrum. All of them will have very attractive capex network rollout investment plan ready, should spectrum is made available, but they would want to see it reasonably priced," Phillips added.

He warned that drip-feeding spectrum, or releasing only a small chunk of airwaves for the auctions, would create artificial pricing based on the scarcity value. The industry lobby has also asked the government to clean up the 2G 'mess' following Supreme Court's orders quashing 122 mobile licences issued in 2008.

GSMA, which opened its India office in Delhi on Tuesday, also highlighted several concerns of the industry, including inadequate availability of spectrum, refarming of selected bands of spectrum, opening up of the 700 MHz band, retroactive implementation of taxes and impending auctions of 2G mobile permits.