Business Today

Spectrum auction: A missed opportunity to empower Digital India

The recently concluded telecom auction, the largest-ever, seems to have worked against the idea of Digital India

twitter-logo Manu Kaushik        Last Updated: October 15, 2016  | 11:22 IST
Spectrum auction: A missed opportunity to empower Digital India

Manu Kaushik, Associate Editor, Business Today
Last year Narendra Modi-led government launched the Digital India programme with much fanfare. The central pillars of the mission include universal access to mobile connectivity, public internet access, e-governance, electronics manufacturing, broadband highways, among others.

ALSO READ: 5 things to know about country's largest spectrum auction

The basic requirement to fulfill these objectives is to have affordable mobile connectivity - both data and voice - across the length and breadth of the country. The task is huge, and therefore, the government alone cannot implement it. The role of private sector is crucial. The recently-concluded telecom auction, the largest-ever, seems to have worked against the idea of Digital India.

For instance, a large part of the spectrum that was put on sale left unsold - only 965 megahertz (MHz) out of 2,354.55 MHz could be sold. In terms of revenue generation, the government could garner bids worth Rs 65,789 crore out of the expected Rs 5.63 trillion (at base price). While spectrum across all telecom bands were on block, the government could not sell 700 MHz and 900 MHz owing to high reserve prices set by telecom regulator TRAI for these two bands.

The airwaves in these bands are far superior to other bands in the delivery of telecom services. Both 700 MHz and 900 MHz are low-frequency bands that provide wider coverage, that's best-suited for rolling out telecom services in rural areas where private telcos hesitate in spending big on infrastructure. In the absence of sufficient telecom infrastructure (towers), low-frequency airwaves can fill the gaps and enhance connectivity.

Experts say that exorbitant pricing of spectrum will lead to status-quo on the challenges faced by telcos in improving rural connectivity. "Three or four solid networks around the 700Mhz would have taken care of a lot of rural broadband networks. This is a missed opportunity," Sunil Bharti Mittal, chairman of Bharti Airtel said recently.

Somewhere the government have strike a balance between achieving Digital India goals and selling the natural resources at the market prices. In most likelihood, the next round of auctions will see these unsold airwaves coming up for sale again at discounted rates.

In its annual World Development Report (WDR) titled Digital Dividends, the World Bank says that India has 1.063 billion offline population, which is more than 25 per cent of the world's total offline population. China, in comparison, has 755 million offline population.

Affordability is another issue. While tariffs have come down recently due to heated competition in the market, there's still room to further reduce them.

As per International Telecommunication Union (ITU) data, India is seventh-cheapest country to own a mobile phone. The average monthly cost of Rs 194 is higher than other emerging economies such as Sri Lanka (Rs 63), Bangladesh (Rs 94) and Nepal (Rs 178).

According to some estimates, nearly 93 per cent of the country is currently covered by telecom services, and telecom companies are working to cover the remaining 7 per cent. A cheaper spectrum, especially in non-metro circles, would have given big push to rural connectivity and reaching the goals of Digital India to some extent.

  • Print

A    A   A