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India can follow Bangladesh model on spectrum pricing, says Manoj Kohli

Thomas K. Thomas
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Manoj Kohli
Manoj Kohli

Bharti Airtel is one of the four operators that have been given 3G spectrum in Bangladesh. The company paid $105 million for acquiring 5 MHz spectrum. In comparison, the base price for 3G spectrum was set at Rs 3,500 crore for the same amount of airwaves in India in 2010.

Manoj Kohli, CEO of international operations and joint Managing Director of Airtel, spoke to Business Line on the key learning for Indian policy makers.

Compared to Bangladesh, don't you think the price you paid for 3G spectrum in India is very high?

The Government of the day has to give priority to affordable broadband services over revenue maximisation. In Bangladesh, the objective is to connect all 150 million population with 3G services. In India too, we want to reach out to the 700 million people in rural areas, but if we have to pay a huge upfront fee then it impacts our ability to invest in networks. The Government has to realise that the economic gains from broadband is much higher in the long term than what it gets from spectrum sale in the short term.

TRAI has proposed to lower the price so that would help isn't it?

This is a welcome move. The industry needs support so overall TRAI has done a good job. However, there are still some issued that needs to be addressed, I am sure the TRAI will look into it.

What are the concern areas?

Re-farming of 900 MHz spectrum is a worry. No where in the world has this happened where operators of this size have been forced to go through a transition, we also expected a roadmap on extended GSM band.

What are the key differences in approach by the Government in Bangladesh and here in India?

Bangladesh, where the population is around 150 million, the 3G auctions got concluded this week, the regulator auctioned 8 blocks of 3G spectrum (5 MHz each; total of 40 MHz) and four operators participated in the bid at a base price of $20 million/MHz. At the end of the auction, 5 blocks (25Mhz for 15 years at $21 million/MHz) got sold and the regulator has kept 3 blocks (15 MHz) in reserve for future needs of the industry. In future, the spectrum allotted can also be used for offering 4G/BWA services.

The key take away from this is that the Government focused on promoting affordable 3G services. There was sufficient spectrum on offer and government’s objective was not revenue maximisation but promoting mobile broadband at affordable rates and encouraging the industry to invest.

This ensured that industry will be able to make long-term investments in 3G and the economy will benefit from these services that have a strong multiplier effect. Above all, the customer will be the winner.

thomas.thomas@thehindu.co.in

(This article was published on September 10, 2013)
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