Payal Malik, LIRNEasia’s Senior Research Fellow resident in India, has written an op-ed analyzing the spectrum mess in India and proposing that it be cleaned up in tandem with license renewals that are coming up. Pakistan used the opportunities afforded by license renewals to clean up some policy mistakes made prior to 2004. We hope to feature a piece by a person involved in that process shortly, in an Indian newspaper and/or here.
However, there is one window of possibility of cleaning this pricing conundrum. Very soon, many licences will be coming up for renewal. Trai has been reiterating that the contracted spectrum is 6.2 MHz with respect to GSM and 5 MHz with respect to CDMA. The licensee applying for renewal should then be assigned spectrum up to the committed amount as per the current licence. Any additional spectrum that these licensees require to carry out their operations should be priced through a transparent auction.
“the recommendations and the alternatives offered are still arbitrary and non-transparent. Pricing of 2G using 3G price as a benchmark is arbitrary, since the prices of apples cannot be used to price oranges.”-
The author has defined the situation in a very clear way. Bangladeshi government is also comparing the worldwide 3G auctions’ money earnings with the existing 2G operators renewal process as Indian government is doing.
But both the governments/regulators do not consider the peoples facility, flow of voice or data connectivity, mobility and investment instead. If the government earns too much in the process of licensing then the roll out plan would be slow down.
Money for whom? Huge money to the government exchequer with a delay roll out plan and sufferings of people, or flexible licensing and fast roll out so that people can get service fast and money submission to the exchequer by revenue sharing? Which one is better, govt. should rethink.