Re: Telcos to add Rs 92,000 crore debt; another auction to hit Airtel, Idea and Vodafone finances severely

Several analysts are saying pretty much the same thing. That, Reliance had
the last laugh in this case. Overall i tend to agree with the assessment
that the extremely high price that the auction has fetched is the cost that
would be passed on to the common man one way or the other. The killing that
government made with such a high auction price would do nothing more than
filling the budget deficit thanks to the mindless expenditure.

Having said that, GSM technology isn't quite the same when it comes to
wireless LAN technologies in terms of its ability IN sharing the same
spectrum my multiple operators. Due to these technical limitations of the
technology there could be total chaos if just anybody and everybody were to
launch GSM service using the same all overlapping set off radio
frequencies. Clearly there is a need to allocate, manage, monitor the use
of spectrum to avoid chaos. So one way to think would be that the price of
spectrum should not be the price for the right to use but for the cost
coverage of overheads involved in managing fair use of the spectrum by
multiple operators. Which brings up another difficult question that is,
what constitutes fair use of spectrum. Reporting current number of
subscribers, current usage of spectrum, the actual peak busy hour call
attempts, the actual number of dropped calls etc. isn't always done in most
honest fashion. No wonder a need was felt to do independent audit for sake
of fair revenue sharing. However it is the same old question of what may
seem like double-taxation. Consumer ends up paying VAT on handsets, service
tax on the telco service they consume yet they do so on price of service
that has already paid a huge price to government in form of spectrum price
and will also pay recurrently as revenue share as well.
On Feb 16, 2014 7:59 AM, "Arun Mehta" <[email protected]> wrote:

>
> http://m.economictimes.com/news/news-by-industry/telecom/telcos-to-add-rs-92000-crore-debt-another-auction-to-hit-airtel-idea-and-vodafone-finances-severely/articleshow/30420117.cms
>
> Here's what I think just happened: Reliance bid up the 2G spectrum, so
> that Airtel, Idea and Vodafone see a huge increase in costs, without the
> ability to substantially increase tariffs. Isn't anyone else shaking his
> head at India still auctioning 2G spectrum, when probably nobody else in
> the world is deploying anything less that 4G?
>
> As regards 3G, I read an article that pointed out that only a very tiny
> fraction of mobile users have 3G. The huge costs incurred for the spectrum
> have not borne fruit. If anyone else read such an analysis, please share.
> Now, with Reliance heavily investing in 4G, the people who took 3G for the
> faster data will swiftly migrate to 4G -- the last nail in the coffin for
> 3G, which some of us have been predicting was doomed for over 10 years now
> -- only because the spectrum was to be auctioned?
>
> Auctions for spectrum do not work. We have discovered that time and again
> in this country, and the experience of other countries isn't that great
> either. I know I'm repeating myself, but it is now no longer necessary for
> people to have exclusive spectrum. As long as rules are framed, as in the
> case of WiFi, which allow spectrum to be shared, corporates no longer have
> to make unrealistic guesses as to how much spectrum they will need a decade
> or two from now. They could be allowed to use the spectrum at a certain
> percentage of the revenue they make from the spectrum. Those offerering
> free services would get free spectrum, and the rest would ramp up their
> payments for spectrum as their revenues went up.
>
> Arun Mehta
>
> _______________________________________________
> India-gii mailing list
> India-gii-IAPFreCvJWP2/[email protected]
> https://lists.india-gii.org/mailman/listinfo/india-gii
>
>

_______________________________________________
India-gii mailing list
India-gii-IAPFreCvJWP2/[email protected]
https://lists.india-gii.org/mailman/listinfo/india-gii