Blog Post

To Sell or Not To Sell 3G Spectrum

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

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.

8 Responses to “To Sell or Not To Sell 3G Spectrum”

  1. Sell off course! Om you hit it right on the mark. The internal revenue service needs the proceeds. Off course, this is assuming they will actually use the proceeds towards a real telecommunications budget and not to fill up the coffers in politicians swiss accounts.

    Cynicism aside, I do beleive the Indian Govt should sell the bandwidth – welfare state is for the poor and needy and they don’t need bandwidth – it aint filling their stomach. They need jobs. Use the money to implement regulations, that will prove to be benefecial for the masses. For example, sell the spectrum with conditions attached to them, such as a portion of the spectrum must directly benefit an absolute minimum of rural communities.

    We are not ready for pure capitalism yet, and we cannot afford welfare on a dime for non-life-critical systems.

  2. Jesse Kopelman

    I’m with Robert. The short term gains of licensing fees are quickly overshadowed by increased tax revenues from technical innovation. The absoletely worst thing they could do would be to give exclusive licenses to incumbants for free. Spectrum auctions are slightly better than that but still bad news (see 3G deployment, 3 years behind schedule and counting).

  3. They should consider giving it away free, but only for unlicensed use (I.E. a’la 802.11, 802.22) But that would take a bit more planning. It could be a part of India becoming a leader in wireless tech. But again that would take some thought to do the “unlicensing” correctly. (The FCC got it kind of right with the 2.4Ghz and 5Ghz UNII bands, mostly by accident but also through the help of some visionaries at Apple and a few other places in the 80’s)