Needless noise over mop up from 5G spectrum auction

Keeping the spectrum prices exorbitantly high may create unnecessary entry barriers and indirectly promote monopoly or duopoly.

Published: 10th August 2022 06:35 AM  |   Last Updated: 10th August 2022 06:35 AM   |  A+A-


Image used for representational purpose only. (Photo | AP)

As questions are being raised on the pricing of 5G spectrum that was auctioned recently, it once again brings to the fore the question whether the government should go for value maximisation or look at larger public benefits from the sale of national assets. The thumb rule is that national assets should not be sold at throwaway prices and the allocations should be made in a transparent manner, but those raising questions over the pricing must realise that value maximisation cannot be the sole purpose of the auction of something like telecom spectrum, which is at the base of the country’s digital infrastructure. These are ultimately ‘goods’ of public use, and the cost of acquisition of spectrum could ultimately affect the price of telecom services offered by telcos.

Keeping the spectrum prices exorbitantly high may create unnecessary entry barriers and indirectly promote monopoly or duopoly. In the auctions held in March 2021, none of the players bid for the 700 MHz band as they found the base price too high, and not commercially viable. A report by a parliamentary committee headed by Congress Lok Sabha MP Shashi Tharoor had pointed out high spectrum prices as one of the key challenges in adoption of 5G in India. The committee noted that considering the financial stress in the (telecom) sector and that the 5G ecosystem is yet to be developed, a high reserve price may adversely impact the ability of service providers to roll out 5G.

The criticism over lower realisation from sale of 5G spectrum should not be solely based on price determined by the bureaucrats in the Department of Telecommunication (DoT) or telecom regulator. It should also be judged by the willingness of buyers to bid at those exorbitant prices. We all know how the brouhaha over 2G spectrum allocation in the UPA era led to stress in the telecom sectors, with many calling the CAG’s Rs 1.76 lakh crore loss figure too atrocious and simplistic. Let’s hope the noise over sales proceeds from the recent spectrum auction does not snowball into another unnecessary controversy delaying the adoption of 5G in the country.


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