Government should protect mobile consumers
Although the 3G auction held in 2010 resulted in the government landing a huge booty, the operators are still struggling as 3G service is yet to pick up momentum. All the mobile operators have stretched balance sheets, with debts running into thousands of crore of rupees. Reports indicate that the operators will continue to struggle as higher debts will significantly reduce the operators’ credit-worthiness, thereby bringing down their ability to raise money for future auctions. A report states that almost all the Indian mobile operators are loss-making. It is quite unclear if 3G uptake would turn them profitable or if the operators need to wait for efficiency due to mergers or acquisitions.
The response to the much-hyped 2G auction due to the cancellation of 122 licences has been muted, resulting in much lower revenue for the government, against the target of R40,000 crore. While there were no participants for CDMA auction, for GSM there were no bidders in four key circles. The base price for pan-India spectrum was set at R14,000 crore, and R18,200 crore for 1800MHz GSM and 800Mhz CDMA spectrum, respectively. This base price is 4-7 times higher when compared with the base price during the 3G spectrum auction held in 2010 or during Raja’s allotment to companies in 2008. The telecom regulator has justified the high price by citing that tariff would go up only by a few