(Last Updated On: July 15, 2013)

If you have followed last two spectrum auctions held by Government of India, you would know the the kind of money operators have to spent in acquiring those airwaves.

Given that India has one of the lowest Tariffs in the world, picking up a Pan-India license is extremely difficult for any single Indian telecom operator.

Though these operators have cut-throat competition between them to acquire new subscribers, it becomes imperative for them to join hands when it comes to achieving Pan- India coverage. In this scenario, spectrum sharing is an option which works out quite well for them.

Now, Indian telecom department is planning to dis-allow spectrum sharing among the operators, which in turn may severely impact their growth plans.

The Reason?

DoT thinks that allowing of spectrum sharing may negatively impact their future spectrum sale as it fears sharing of airwaves at this stage would create lobbying amongst telecom operators. This would also mean that Government will not be able to get full value for the airwaves during auction.

DoT worries that if operators join hands and agree upon geographical distribution of spectrum amongst themselves, the bidding for airwaves will not see any competition and thereby not garner the true value of airwaves.

To come up with some sort of a solution for this problem, DoT has setup a internal committee, who will also try to learn the best practices followed abroad.

Our Opinion

DoT has to understand that if spectrum sharing is not allowed, it will hit consumers more than anyone else. If Operators will have to buy spectrum at higher pricing, the cost of providing service will obviously go up and consumers will end up paying higher price.

At the same time, spectrum sharing also makes logical sense, as airwaves will be utilized to maximum. If Spectrum sharing is not done, in many circles airwaves may remain under utilized.

Yes, spectrum sharing at this juncture may affect auction pricing, but in the end it will be beneficial to Indian consumers as lower airwaves cost means lower pricing to consumer.