It seems almost difficult to believe that the auctions for 3G spectrum and wireless broadband services will actually kick off today, given the numerous delays and countless controversies that have dogged what will be India?s first spectrum auction. Of all the stakeholders involved, the consumer has undoubtedly suffered the most from this long delay, having to wait much longer than consumers in most other countries to get access to high-speed broadband and value-added 3G telecom services. Even now, the rollout of the services only begins by at least the end of this year if not until early 2011?that?s the natural lag between winning a licence and actually setting up the infrastructure to roll out services. Apart from consumers, even telecom companies are set to gain from the rollout of 3G in particular. The Indian mobile market being one of the most competitive in the world, tariff wars have put extreme pressure on the profit margins of all major telecom companies. The value-added services that come with 3G will open a new revenue stream that will also be more profitable over the medium term. Of course, the telecom industry, too, must share some of the blame for the delay. Many were reluctant to commit huge sums of precious resources through the period of the economic slowdown and were happy to play along with the delays.
Still, there is little doubt that the bulk of the responsibility for the delay lies at the door of the government, chiefly the department of telecom presided over by A Raja. The same department had earlier handed out some 2G licences on a first-come first-served basis, causing considerable loss to the exchequer. And it did little to expedite the process of 3G auctions, which ought to have actually happened sometime in the summer of 2008, before the financial crisis broke out in September. The defence forces and their parent ministry also played their part by delaying the handing over of spectrum to DoT, the kind of turf war someone in the government ought to have stepped in to avoid. In any case, the auctions, when they finally happen, will hopefully leave behind all the problems that have surrounded the process until now. Apart from consumers and operators, there is a lot at stake for the government as well, which is banking on the auctions yielding at least Rs 35,000 crore for its revenue kitty.
