To Sell or Not To Sell 3G Spectrum

Mike brings to attention that India is grappling with a unique set of problems when it comes to their 3G direction – whether to give away new licenses for free to existing license owners or charge carriers for it. This has everyone in an uproar. Indian regulator, TRAI thinks India should give it away. But then these are the same geniuses who went with the 256 kbps definition of broadband, so you can’t really take them too seriously.

The wireless operators in India already have cash flowing into their coffers, and can afford to pay for the spectrum. Given that spectrum is nation’s public property, giving it away for free should not even be considered. I think it is clear to me – they should charge more like a leasing fee for it. The spectrum compromise, should be that the money should pay for helping armed forces move to a new frequency and perhaps create a rural telephony fund. Still, I see an impasse over 3G emerging in India, which could stall India’s fast growing telephony markets.

As an aside, one of the big stories in India that is not being covered in the west is the ongoing split between the Ambani family – the owners of Reliance Infocomm. Reliance is going to go to Anil Ambani, one of the brothers who also happens to be a member of the upper house in the Indian parliament. There are rumors that Reliance Infocomm is not all that as it is made out to be. A 3G license for free could come in quite handy, don’t you think? Or perhaps it is me who sees shapes in shadows.

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