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| Letters: Don't write off 3G |
| Business Standard / New Delhi Feb 08, 2010, 00:43 IST |
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In your editorial “Better late than sorry”(February 2), you provide little support to your assertion that “the commercial viability of additional spectrum, especially 3G, has been brought into question by the unbridled competition in the telecom market”. You accept that older GSM players are losing subscribers to newer ones since the latter have relatively unclogged networks. You also argue that for new players, the advantages of 3G are less immediate. It is difficult to accept that incumbent operators would forego the opportunity offered by 3G auctions. Since only few slots are on offer and even new competitors would want to bid if only to prevent incumbents from getting cheap spectrum, the bidding will have to be aggressive.
New GSM players — both recent entrants as well as CDMA players now offering GSM services — bought from the government in 2008 at bargain prices of 2001.These are complex competition issues thrown up by India’s unorthodox spectrum rules. Inadequate attention to competition issues can easily jeopardise the huge gains made in the telecom sector and especially hurt our prospects in broadband services. Even if some more improvements are possible in the design of the auction, few will deny that the proposed 3G auctions will be an important first step in the move towards a more transparent and competitively neutral spectrum regime.
Besides, since spectrum is intangible, questions about its ownership are largely academic. Most stakeholders have been and would be content to be authorised to use the spectrum required for their services. Prospective 3G players would want that spectrum is reallocated for commercial use.
It is unclear why defence is unable to vacate the 3G spectrum. Recall the several reports about agreement between the DoT and the defence ministry on the modalities of vacating the spectrum. As some press reports hint, the problems may reflect political economy more than technical constraints. In view of this, moving the auctions to August is no assurance that the powers-that-be will be able to hold them.
Also, it is difficult to understand the law ministry’s reported position that spectrum must be auctioned only after it is vacated. Over 100 2G licences were paid for much before the spectrum was allotted. In some circles, the process is still incomplete. Indeed, it would make eminent sense to use spectrum auction bids to determine the order in which companies would receive the available spectrum.
Mahesh Uppal
Com First (India) Pvt Ltd
Faridabad
Readers should write to:
The Editor, Business Standard,
Nehru House,
4, Bahadur Shah Zafar Marg,
New Delhi 110 002,
Fax: (011) 23720201;
letters@bsmail.in
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