The auction of 2G spectrum ending February 13 will have enriched the exchequer by roughly R61,000 crore or over $9.7 billion. This is good news for a deficit-strapped government but also a reward for poor handling of spectrum and questionable auction design. The auction succeeded because it forced a “now or never” option on bidders with little information about future spectrum availability or when the next auctions will be held. Operators who bid in similarly “successful” auctions in 2010 for 3G and BWA spectrum still offer limited services with that spectrum, demonstrating that while the high demand for spectrum makes auctions necessary, merely holding them is not sufficient. Therefore, it is critical to promote efficient use of available spectrum to reconcile the competing agenda of the exchequer, industry and users. This article highlights how this can happen.
Take spectrum in 800 and 1800 MHz bands. The existing demand is manifest proof of their commercial value and that much of valuable spectrum is unusable today because of haphazard deployment. Fragmentation locks up precious spectrum much like poorly used parking lots which could otherwise accommodate more cars—particularly bigger vehicles. This hurts deployment of broadband technologies, like 3G, LTE, which need more contiguous or “unbroken” spectrum but can deliver greater bandwidths and flexibility than 2G technologies.
Harmonisation of spectrum could free up considerable value of spectrum. For example, companies have different spectrum frequencies for cities within a circle for which they have a licence. This raises costs and hurts efficient use of spectrum. Similarly, while several bands can be used for existing technologies, some like 1800 MHz and 2100 MHz are used more widely across the world for 4G and 3G deployments, respectively. The resulting global economies of scale mean considerably cheaper equipment as well as devices. India ignores this at its peril.
Spectrum can be freed up by defence forces without compromising their work. Historically, they were allocated most spectrum because of the terrains and circumstances in which they operate; wireless networks are cheaper and take less time to deploy than fixed lines of copper or optical fibre. With the introduction of mobile phones, defence