wordpress blog stats
Connect with us

Hi, what are you looking for?

Editorial: Why Google Should Bid For Wireless Spectrum In India, But Probably Wont

An article in the Business Standard, yesterday, suggested that Google is considering participating in India’s wireless auction, and that it could bid for either the 3G or Broadband Wireless Access auction . The article was based on inputs “telecom industry sources”, there was no official confirmation or denial from Google. We’re awaiting a response as well, and according to our Google sources, there are no such plans.

However, I do hope that the Business Standard story is right, and Google does plan to get involved in the BWA auction, whether by themselves or with a partner. The BWA auction is an opportunity to get broadband right in India, and I think you need a long term play to make it succeed. You need three things – someone who understands that the value of incremental usage among consumers (hence a long term play), understands the Internet space and what consumers want, and has really deep pockets: companies like Google and Yahoo fit that bill.

I don’t think any of the telecom operators in India have the DNA of an Internet company to understand or perhaps consider driving usage, unless forced by government policy. Given that most of their resources and top management bandwidth is tied up in the battle over mobile voice, they don’t appear to be interested in broadband beyond a landgrab. One can’t really blame them because in the medium or even long term, the ROI in broadband just isn’t there. The ISPs are too small as well.

My conspiracy theory is that the only reason that the government in India didn’t open up the last mile access – currently BSNL and MTNLs mandate – is because they wanted to auction BWA spectrum and deploy the money raised elsewhere. At Rs. 1750 crores as the base price for the BWA spectrum (one potential bidder told me it’s ridiculously high) most ISPs are likely to pass much of the cost to the customer.

On the other hand, I have been concerned about the growing dominance of Google in India – it clearly dominates the tiny Indian Internet industry and its online advertising market, and most Internet businesses in the country are dependent on Google for sustenance, whether through organic or inorganic traffic from search. Stop SEM and see how traffic drops for most Internet companies in India. Google owns and operates the top 3 sites in India – Google, Orkut and YouTube. We’re in a situation where most online businesses in India aren’t competing with Google – only competing among themselves for leftovers – and innovation and funding might be stunted because of that.

Advertisement. Scroll to continue reading.

Google has undoubtedly earned this dominance, and are doing their bit, along-with others, to grow the market, with investments in Indic language tools, programs in schools and even that Internet bus. But it isn’t enough. At just around 7 million broadband connections, and an online market that is probably (estimated) less than the Rs. 3500 crore base price for the 3G spectrum auction, there is much more to be done.

Google India can’t be content with a Rs. 400-450 crore (unconfirmed) topline. Though it may not appear worth it in the short or medium term, and Google probably wont bid for the auction, I think it should partner with a potential bidder: in order to grow its own business in the country, it has to grow the market…maybe even break this slow paced market. The ISPs wont be able to do it by themselves.

Update: just a thought: instead of involving themselves in an expensive auction, companies like Google, Yahoo can also look at partnering with ISPs, post-auctions – to subsidize broadband. There has to be content and education to drive the need for connectivity.

You May Also Like


Once Google phases out third-party cookies from its ad-tech business, it won’t build alternative mechanism to track individuals’ behaviour across the internet. The company,...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ