In a story just out, DNA reports that the Indian Telecom Regulator has sent a letter to R Chandrashekhar, Secretary, DoT, highlighting that telecom operators have begun offering 3G services in areas not allocated to them, wherein they did not pay a license fee. This refers to a roaming/spectrum sharing arrangement inked between telecom operators, but uses that phrase we hear often related to scams - "loss to exchequer". Here's our take on this arrangement: 1. The Auction itself was a flawed approach: It focused on maximising returns for the government, not on maximising consumer benefit. As a result, we have operators with only 5Mhz of spectrum each, split across telecom circles so that none has pan-India coverage, and they have all been forced to pay exorbitant amounts for a land-grab of spectrum that doesn't quite work to their advantage. The fact that some of them have chosen to tie up and share spectrum shows that they don't view 3G as a competitive advantage, and it was only a defensive move to take part in the auction. The meantime, the government policy focused on maximimising profit and creating artificial scarcity and boundaries has resulted in some consumers being effectively denied access to high speed spectrum just because their preferred telecom operator did not win spectrum in that circle. The government policy on the 3G auction has been out of sync with consumer needs and the state of the telecom industry, looking only at financing its own fiscal deficit. If you…
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