Rights and Wrongs in Governments selling out Wireless spectrum by auction or else.
Link to article. http://wp.me/p1ZsI2-jy
Introduction: Government’s Policies shall be People Centric, not Money Centric. Having been actively associated in the implementation of one of the early GSM systems in India in 1995, I choose to remain stead fast in my opinion I had on this subject from the inception of GSM for the following reasons:-
- Ownership of Spectrum shall remain with government.
Wireless Spectrum is a non-renewable national resource and as such need to be handled scrupulously and judiciously by Government and Regulatory authorities. Technologies, Network topology and Service Provider ownership undergo changes; only Spectrum remain unchanged. Therefore, ownership of the spectrum shall remain with Government by allowing only its ‘right of use’ so that spectrum can be withdrawn and reallocated where it is no more required or not being put to intended use by any Agency or Operator.
2. Need to move with fast changing Technology. Technology is changing very fast. What is best today would become obsolete tomorrow. Different technologies would need different frequency layer, band width and mode of connectivity making it necessary for Government and Indian Telecom Industrialists to closely follow the world trends. It is an unworkable proposition to go through sell and buy process of fresh wireless spectrum every time there is inception of new technology.
3. Growth of Telecom is the need of the Nation: As growth of Telecom in the country is more in the interest of the nation than of the Industrialists, the policies of Govt. on Service industries like Telecom need to be people centric, not money centric. Fast growth of telecom being the prime object; it is utmost necessary for the Government to ensure its smooth operation without delays and if necessary meet TSP’s needs at subsidized rates so that the service cost to end users will continue to remain low and the service is more and more available, accessible and affordable to common man. Therefore, Governments policies on Telecom shall be people centric and not money centric.
4. Telecom growth can enhance GDP: The facts the economists need to know is that growth of Telecom penetration across the country can contribute much more to GDP than the money Government could earn through selling of Licenses, Spectrum etc.
5. M&A of business houses is a continuous process. Telecom business houses are becoming behemoths and M&As are going to be the order of the future. Therefore, the ownership of spectrum given out on long term contract to large number of Telecom players, will eventually end up in the hands of few business houses. It will have many negative impacts like blocking competition, non-availability of spectrum for new technology roll outs by fresh entrants etc. even for the needs for the Government such as Exclusive Govt. owned communication Systems & Networks for Administration and Crisis / Disaster management. http://wp.me/p1ZsI2-dh
6. Too many Network Operators will crowd the Industry. Allowing large number of Network Operators is not desirable for various reasons. Segregation of Service Provision from Network operation with more Mobile Virtual Networks (MVN) for keeping the investment costs low and better utilization of Spectrum is going to be the path of telecom growth in the future. Please see my blog: http://wp.me/p1ZsI2-t
7. Convergence will be order of the future. With the advent of LTE and other new generation technologies making the wireless portion of the network less and less, it will lead to convergence of Systems, Networks, mode of connectivity and user devices. Please see my blog http://wp.me/p1ZsI2-26
8. De-linking Spectrum from license is impractical: The proposal of de-linking spectrum from license will only add to the confusion about telecom license and Spectrum allocation issues. Please see my blog. The never ending Telecom muddle in India. http://wp.me/p1ZsI2-gG
9. Government needs Income. No doubt, Government needs to generate income from all possible sources. However, auction alone can never be a good option. With proposed re-farming there will be enough spectrum for all. In such a scenario of ‘Supply exceeds Demand’ auction can never be right option. Why because, ultimately Govt. will have to give required spectrum as government cannot allow Telecom growth to stagnate for want of policies in place. It will end in getting everything messed as what happened in the hurried policy of allocation of spectrum on mode of first-come- first- served basis. What I would suggest from the vast experience I have in Telecom space, is as follows.
Government shall have a long term Pan-India Telecom policy. Cost to service providers shall be a combination of a basic charge for the License that include ‘right of usage’ of whatever Spectrum as required by them from time to time.
For example; Tenure of PAN India license shall be 25 years and the combined cost for License and Spectrum usage charge could be say, Rs.7500 Crores payable in yearly installments of Rs.300 Crores. In addition to this an additional charge in the form ‘revenue share’ based on active subscribers also could be levied to cater for additional quantum of spectrum needed with expansion of networks. (P.S. The amount and tenure of license period I have mentioned above is just indicative and hypothetical and these could be decided based on various other factors related to the business growth and also related to economy situation in India and the world.)
The distinguishing factor in what I have suggested above from what it is now is very simple. The difference in this case is that the Licensee can upgrade or migrate and use any technology during the tenure of license and it will be the responsibility of the Government to make available the type of spectrum according to international standards as and when the licensee is in need of it with no additional cost.
Was not 2G scam – ‘Much-a-do-about-nothing’?
See how simple the whole issue is and that is why I prefer to say that all these commotions have been “Much-a-do-about-nothing’. Fact is that Government could have earned much more in course of time than the presumptive loss figure CAG had brought up and more importantly could have avoided the negative impact it had caused and helped quicker GDP growth.
Conclusion: It is only prudent for the Government and TRAI, CAG, Judiciary etc., to take help of right Telecom technocrats with futuristic vision and knowledge, to come to proper Governmental and regulatory decisions. Otherwise it will end up in opening a Pandora’s box landing the Government and Industry into endless litigation and hampering growth of Telecom penetration in the country if not end up in killing the industry itself as a whole. Not withstanding anything said above, if any one in the Government, Politicians or in private sector enterprise indulged in misuse or corrupt practices for personal gains for self or others, law of the land shall take its own course. Otherwise, Let us not kill the goose that lays gold eggs for petty political gains.
aham Paul. P. e-mail: email@example.com Tweet @PA_Paul