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The process of formulating policy for the high-speed, third generation, or 3G, cellular service seems to be taking a tortuous and controversial path. It is queer that the Government is tearing itself apart over whether it must throw the bidding for the licence open to all or restrict it to those currently offering the conventional mobile service in the country or abroad. The regulator wants a restricted auction; so does the Department of Telecommunications, but the Union M inister for Telecommunications, Mr A Raja, himself, has spoken of throwing the field open to all. To ensure that responsibility for the decision rests on more heads, the Law Ministry has suggested that the ticklish issue be resolved by a Group of Ministers. The buck has been passed and more time will be lost quite unnecessarily.

Mr Raja faltered last year when he chose the first-cum-first-served option to provide 2G licences to new service providers, but he is intuitively right this time in pressing for an open auction. The contention of the Department is that an open bidding will let in non-serious players into the fray and should they win, the rollout of services will be slow. That position is first of all inconsistent with what the same department did when it handed over 2G licences last year on a first-cum-first-served to companies with no prior operating experience and at a price that was not determined in a contemporary auction.

An open auction commends itself on many counts. With all existing 2G service providers fully eligible, one can expect them to bid aggressively given their appreciation of the growth prospects in the country and not submit themselves meekly to any “non-serious” players. If any new player should outbid them to a point where the service is seen to be unviable, the worst that could happen is that the operator would be unable to pay the fee and the Government would be forced to terminate the licence. This is not such a serious issue as 3G is merely a value-added service, unlike the last time round when the Government could not take a similar step on the basic mobile service as it involved public interest of a far greater scale.

Indeed, it would only be good for consumers if the field of service providers expands. One of the chief reasons for the runaway success of the mobile telephone service in this country has been the rising scale of competition among the service providers. From two operators to a region in 1995, there are now at least five. As they fight to win consumers, the tariff has declined. Yet joy for consumers has not come at the expense of the dozen wireless service providers for they too have stayed profitable, with some like market leader Bharti being exceptionally so. An open auction will also ensure the Government gets the maximum licence fees for the new service, an option it did not have last year when 2G licences were handed out at a price determined four years earlier. It would be unwise for the Government to consider any other way to determine who should win the right to offer the 3G service.

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