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Column: Resolve the artificial spectrum scarcity

May 22 2014, 20:54 IST
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SummaryAll spectrum lying idle in the 700, 800, 900, 1800 and 2100 MHz bands need to be auctioned at one go

The renewed focus on development proposed by the new government following a decisive mandate is an encouraging sign. The telecom industry especially, is pinning its hopes on a government led by a dynamic and far-thinking leader, who is known to understand and encourage the transformative role that telecom and IT can play in changing the fortunes of the country. Mobile technology enables last mile connectivity and we hope that the new government will leverage the power of this platform for inclusion and distribution.

While there is a need for some fundamental shifts in the policy approach to telecom, which can be addressed over a period of time, I believe that there are some immediate measures, which, if taken, can revitalise the sector and put it back on the path of growth.

Some such low-hanging fruit ready for picking, include a follow through on the spectrum reforms process that has already been initiated, and a review of the very high burden of duties and levies on the sector.

Spectrum is the basic raw material for telecoms and hundreds of MHz is lying idle with the government while the networks are in desperate need for more of it. This ‘artificial scarcity’ needs to be resolved at the earliest such that it can be used to deliver on the connectivity and broadband objectives of the country.

The first step towards spectrum reforms was taken by the regulator in 2013 by lowering the reserve prices and introducing a uniform spectrum usage charges. This led to a successful auction in February 2014, generating over R61,000 crore for the exchequer. More revenues can be easily garnered if all spectrum lying idle with the government in the 700, 800, 900, 1800 and 2100 MHz bands, is put to auction together at one go. Also, the spectrum trading and sharing norms on the anvil should be introduced at the earliest to allow market based processes to be implemented for all spectrum related transactions.

Another area, in which some quick affirmative actions will yield multifold benefits, is in the space of regulatory duties and levies. The current levies on telecom in India are one of the highest in the world while excess competition is resulting in arguably the lowest global tariffs. This is clearly an unsustainable situation and many balance sheets are severely strained on account of being burgeoned from both sides. As a first step, the level of licence fees and

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