Column : A spectrum blow to telecom
The recent developments and policy decisions by the government unfortunately give the impression that the prime consideration is contribution to the state exchequer and much less on revamping and consolidation. There are several key issues that have resulted in the standoff in the telecom sector. We need to recognise that the Indian telcos have underperformed in the last three years due to increased regulatory risks and a self-inflicting drive in tariff cuts. If newspaper reports are to be believed, there is no bidder of spectrum earmarked for CDMA services. Only 5-6 companies have deposited earnest money for the auction of GSM-related spectrum. Most of these companies have shown interest for select service areas. It is safe to conclude that the response is not very encouraging and the government may miss its budgetary expectation of R40,000 crore unless there are some surprise irrational bidding. It seems that even the serious players have been discouraged because of an unreasonably high reserve price, which is disproportionate to the current revenues and future growth prospects. The auction needs to be designed in a manner such
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