Assocham dismayed by exorbitant reserve price for India's upcoming 3G auction

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) says, the high Reserve Price of Rs.3,705 cr per MHz which is 35% higher than the reasonable price recommended by the TRAI is rather unfortunate and has sought urgent review of the decision.

It is important to note that quite recently, GSMA, the global telecom body and voice of the industry has also registered its protest on the issue saying that it is concerned by the action of the Telecom Commission to increase reserve prices for India’s 2100MHz spectrum auction next month.

The big question now is will the government listen to these voices coming in from different quarters of telecom industry?

ASSOCHAM Telecom Council Chairman T. V. Ramachandran said, this type of auction would leave less residual money in the hands of the operators for the expeditious rolling out of the much-desired expansion in the data services which are the need of the country for national economic development.

He said, data services are growing 100% y-o-y and this resulting in a severe crunch on the requisite spectrum and impairing the quality of service to the customers.

He further said, concurrently, the high cost of spectrum could compel operators to raise retail prices for economic viability. Thus the public interest is impacted in more than one way due to the latest Cabinet decision.

ASSOCHAM and industry are also greatly perturbed that despite another 15 MHz of 2100 MHz spectrum having been agreed for swapping, this is not included in the auction quantity. It does not matter that it might take some more months, maybe a year, to harmonise and make the additional quantity available to operators.

Ramachandran said, even in the last 2 auctions, operators were compelled to wait for 6 months for the spectrum they had won.

ASSOCHAM recommends that the current 5 MHz and the 'swap' spectrum of 15 MHz i,e a total of 20 Mhz should be put up now on 5 March for auction in order to achieve a fair and reasonable auction. It would be harmful to customer interests, healthy growth of the industry and the overall national economic development to 'throttle' the supply of spectrum for auction.

If not reviewed, the chamber says, this decision also goes against the government vision for “Digital India” wherein of the nine pillars envisaged by the government, the first is broadband highway and the Hon’ble Prime Ministers vision of affordable broadband for all and easy accessibility.