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Wasted spectrum

Telecom auction fails price discovery test

Topics
Telecom spectrum auction | Telecom spectrum | auction

Business Standard Editorial Comment  |  New Delhi 



Once again, a telecommunication spectrum in India has not met its assigned numbers. The short of some spectrum, over only two days, brought in around Rs 80,000 crore, of which about a fifth is to be made available before the end of this fiscal year. Government officials have insisted that the has brought in more than they expected. But that doesn’t mean much, given how much spectrum was left unsold in the first telecom auction in almost five years. Wasted spectrum helps nobody. It is an opportunity cost for the economy that needs to be taken into account; an auction with a reserve price so high and so irrational — resulting in wide swathes of unsold spectrum — is one that is poorly designed and does not serve the economy or consumers. On this occasion, as in 2016, the 700-MHz band remained completely unsold thanks to the poorly set reserve price. The premium 2,500 MHz band too was unsold. This means, even as services have been scaled up across the country and tested by a global pandemic and work at home, and complaints have grown about the poor quality of service, the most productive and effective band of spectrum has not been utilised for development.

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First Published: Wed, March 03 2021. 22:46 IST

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