An open competitive auction for all commercial use of spectrum can resolve most current challenges and prevent future controversies, especially about technologies, since companies will deploy those that deliver the best value for their spectrum. Auctions can help even more if winners are permitted to sell spectrum to other eligible licensees who have approval of regulatory and security agencies. The additional option to buy spectrum from the market will only discourage speculative now-or-never bids without hurting government revenues
Defence forces who currently occupy much spectrum of value to commercial mobile players have reportedly asked for Rs 5,000 crore for moving to an alternative optical fibre network. DoT is reluctant to pay, but could afford to, if mobile players were paying it a fair market price for their spectrum. With a monthly addition of 10 million subscribers, the vacated spectrum could help mobile companies expand further and introduce powerful data services.
Trai is currently consulting on whether MVNOs can be permitted in India. There is scepticism and opposition to the idea in many quarters. MVNOs typically lease spare spectrum from existing allottees to offer branded and customised services to niche customer groups eg youth, housewives, sales staff etc. MVNOs thus promote a more efficient use of scarce spectrum. However, MVNOs make more sense if the spectrum to be leased is not subsidised as India’s clearly is. This is almost the same as government staff subletting their subsidised accommodation at market rent.
Market-based spectrum rules will benefit future services too. Mobile TV services can thrive in a market hooked on Bollywood, cricket and news. Trai has admittedly, recommended spectrum auctions, but again, with idiosyncrasies stemming from current licences.
A consistent approach will hasten deployment of services. The ministry of I&B may have to deal with important content issues, but telecom regulators can rest after mandating that operators deploy technologies that meet international standards. Trai and DoT now admit that impediments to auctions are not legal but stem from legacy telecom licences which promise the holders bundled spectrum. The same licences give the government explicit powers to amend them in public interest.
This power must be used to mandate transparent competitive processes, like auctions, for allocation and pricing of commercially used spectrum. India’s huge stake in wireless, amply justifies this course. Trai has the mandate and expertise and even duty to devise a formula to remove the impediments created by older rules.
This will remove, once for all, the confusion, controversy and uncertainty that haunt an important sector.
*ET-“Mahesh Uppal, The author is a consultant specialising in regulatory issues.”
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