To the extent that prices reflect perceptions of value, demand for 2.5 GHz spectrum in the upcoming India spectrum auction will not be as strong as demand for the other frequencies to be made available.
India’s Telecom Commission has recommended a one-percent spectrum usage charge (SUC) for 2.5 GHz and three percent SUC for all the other bands.
The auction of what is said to be more than 2100 MHz of total spectrum includes assets in the 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz regions.
There also has been speculation that demand for 700-MHz spectrum also will be dampened because of perceived high reserve prices.
The Indian government says 2,000 MHz of spectrum will be up for bid. Compare that to a total former allocation of 200 MHz to 300 MHz for the entire Indian mobile industry.
The total apparently includes spectrum held by firms with expiring licenses, as well as some newly-released spectrum.
The new spectrum lies partly in the 700 MHz band. But that hardly will move the needle, in terms of overall spectrum to be made available, as the total new 700-MHz capacity will add but 35 MHz of incremental bandwidth.
One is left to guess that the 2,000 MHz (total spectrum actually might even rise to as much as 2,400 MHz after harmonization measures) figure is the total amount of spectrum across all 20-odd telecom “circles,” as the serving areas are known.
Oddly enough, mobile operators actually oppose auctioning the 700-MHz spectrum, on the grounds that they will be spending heavily on the rest of the airwaves, and that 700-MHz-capable handset availability, in India, is non-existent.
In fact, some analysts have suggested that spending just for the 35 MHz of 700-MHz spectrum will represent as much as 74 percent of total auction proceeds.
The reserve prices represent an amount about double all prior investment in spectrum in India, across every auction, according the the GSM.
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