With the government not too keen to auction more than 5MHz of 3G spectrum next month, Indian telcos will face a big crunch, the result of which can already be seen with falling internet speeds (see graphic). Limited release of 3G spectrum will also drive up auction bids and so raise telecom tariffs.
Spectrum costs in India are among the highest in the world, more so when you keep in mind high annual revenues given by operators as well as the fact that, in countries like the US, spectrum is awarded in perpetuity. This leaves telcos with that much less to invest in creating infrastructure vital to get high internet speeds.
Spectrum First explores various facets of this spectrum policy: