1. Killing the golden goose

Killing the golden goose

The government has got used to getting $10-12 billion in annual spectrum auctions...

Published: January 15, 2015 1:45 AM

The government has got used to getting $10-12 billion in annual spectrum auctions, but it would do well to consider the possibility it is killing the golden goose. Apart from the high auction bids firms have made over the last few years — the auction in February could fetch $12-13 billion — telcos pay another $3-4 billion each year in license fees, spectrum and microwave charges. Not surprisingly, returns on equity have plunged or remain low for the industry, hurting its ability to invest further in building up networks.

Spectrum First explores various facets of this distorted policy, including the possibility telcos will not be able to participate in auctions in future, and of networks getting badly clogged up.

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