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 larger players who have to pay both prospective and retrospective charges. This will only accelerate the increase in tariff. Government’s plan on the partial refarming of the efficient 900MHz spectrum is expected to add over R1 lakh crore to the exchequer (http://goo.gl/Ae73k), but this again is likely to increase the tariff by over 60 paise.
The telecom industry contributes to 3% of India’s GDP and the government appears to have found a sweet spot to maximise revenue through exorbitant pricing. However, the government’s greed should not push the industry into oblivion. Considering the response to the 2G auction, will the government learn a lesson and take a pragmatic win-win approach?
The broadband wave is yet to pick up, but the expectations are very high and it is proven that broadband penetration contributes positively to the GDP. The National Telecom Policy (2012) has envisioned a “Right to Broadband” and the mobile phone will undoubtedly play a key role in realising this goal.
It is perhaps time for the government to be less aggressive and consider the welfare of the consumers. The government should strike the right balance that would benefit both consumers and the telecom industry. This is the only way India can sustain its claim to fame in the telecommunication sector over the coming years.
The author is vice-president of Symphony Teleca. Views are personal