The Hindu Business Line : 3G auction at last

After two years of debate over the modalities of licensing the third generation (3G) high-speed wireless services, the Government has finally plumped for an open auction to decide which companies will provide the service. To many observers that was always the most obvious route, yet pressure was substantial from existing mobile phone operators to let them have the first right over the new services. Having set up the infrastructure across the country, and done a commendablelljob of transforming telecommunications in the country in just 13 years, the incumbents no doubt merited a hearing. Yet 3G is a new and fancier service, one that has the potential to deliver more than just voice and short messages, and therefore presented a clear case for the Government to open the door to newer providers.

There were essentially two objectives for the Government: keeping this premium service affordable and ensuring its rapid deployment. The former is vital. Elsewhere in the world, 3G services are expensive and provide no pricing benchmarks for the Indian market that has embraced the mobile phone so gratefully only because the services are among the cheapest in the world. If eight million new mobile subscribers are added each month it is a tribute not just to the utility of the device but also to the affordability of the service. It is no one’s case that the tariff for this premium offering can be as low as that for the voice, but the only way to ensure it remains reasonable is to make sure consumers have a wide choice of service providers. The five operator slots allotted should be adequate for now to sustain the competitive fires, although the glaring exceptions are Mumbai and New Delhi, potentially the largest markets for the new offering. It is disappointing that the Defence Ministry has dragged its feet in vacating the wireless spectrum in these two metros. With just one slot up for grabs in the auction, bidding is likely to be intense, and that will unhappily be reflected in higher tariffs for consumers. Also disappointing are the fact that inadequate spectrum has been made available for the CDMA players, and the decision not to auction the only slot available but to provide it automatically to the biggest service provider in each territory. The Government must revisit this idea, especially because it has taken such an enlightened approach towards the GSM segment.

A rapid deployment of 3G across the country is important in the context of the embarrassingly slow penetration of the Internet, especially broadband. If the conventional wired telephone did not reach the masses over the previous century, the constraint was clearly the dependence on physical wires to take communication across the vast country. With 3G, broadband will go wireless and can be expected to take wing. Of course, technology alone does not guarantee consumer acceptance for, as on the Internet, content and pricing will be key determinants of success. For the successful bidders that implies a need to be daring and innovative.

Related Stories:
No 3G auction for CDMA players
DoT plans separate 3G policy for CDMA players
DoT may impose eligibility conditions for 3G auction
DoT can go for global auction for 3G: TRAI

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