According to the global association of mobile operators, GSM Association (GSMA), the high spectrum usage charges (SUC) in the Indian telecom industry are deterring operators from making investments. The industry association is of the view that there is an urgent need for lowering SUC for the auctioned spectrum. The high SUC rates discourage investments by the telecom operators, which in turn lead to reduced profitability.
Further, GSMA said that the operators that carry more traffic through a given amount of spectrum due to a better network and provide more economic benefits to the consumers are paying higher usage charges. Therefore, GSMA has recommended that the government should reduce the SUC levied on operators.
Meanwhile, the association believes that the mobile subscriber growth in India is expected to come from rural areas, where the cost of providing the services is higher and the average revenue per user is significantly lower. This will further demand a reduction in the charges paid by the service providers for the spectrum.
