Government should protect mobile consumers
Due to intense competition, the average revenue per user (ARPU) for mobile operators is less than R100 and this is among the lowest in the world. The ARPU in advanced countries is over R1,500-2500, and even China’s ARPU is over R500. A news report indicates that the reserve spectrum price for the November 2012 2G auction is costlier by many folds, when compared with other countries, when ARPU is used to compute the purchasing power parity of operators.
In the book Telecom Revolution in India, Dr V Sridhar explains that the operators experienced “winner’s curse” during the 1995 spectrum auction. Due to excessive pricing, the operators who won the bids could not afford to pay and the government had to bail them out later. The government should ensure that the 1995 situation is not repeated. In fact, the ill-effects of high 3G spectrum prices in Europe and elsewhere are well known.
The tepid response to the 2G auction could be a dampener for the government’s plan to levy an auction-determined one-time fee of over R25,000 crore aimed at creating a “level-playing field”. Even a lower fee is bound to hit the operators hard, especially some of the
