It is becoming increasingly clear that the denouement in the war for spectrum between incumbent GSM (Global System for Mobile communication) giants on the one hand and new licence applicants and CDMA (Code Division Multiple Access) players on the other is turning into an open season in the telecom industry. The government’s task is not easy. But Prime Minister Manmohan Singh’s signal this week that spectrum allocation must be fair and equitable, also ensuring low barriers for entry, is finally giving shape to the thinking that is going on in the corridors of power.
The din of hopes and aspirations sounded out by the rival lobbies had made the discourse difficult. It is clear that the government likes to make some money from spectrum sales, but not create a condition where unreasonable bids enrich the State’s coffers while threatening the roll-out of telephone lines across the vast country. Auctions are not likely. But the government may demand a fair price while allowing in free entry to new applicants. Between the spectrum charges on the one hand and the spectre of cut-throat competition on the other, the marketplace may find its own chosen handful of wannabes competing with incumbent players like Bharti Airtel, Vodafone Essar, Idea Cellular and Reliance Communications.
The technology neutrality is good for consumers, and incumbents may have to spend fast to expand their networks as well as offer reasonable prices to consumers to stay ahead in the race. That might erode profits and shortchange shareholders. But then, this is a free market reality they will have to contend with. One only hopes that unseemly court battles on specious technicalities do not spoil the game and operators focus on healthy competition in the marketplace. Incumbent GSM giants still have the 3G (third generation) telephony as a new field to conquer and the market is bigger than before and growing at a healthy clip in a world where the knowledge economy is driving global growth to a significant extent. Policy-makers are trying their best to balance interests, and it is up to the corporate sector to fight for market share than regulatory fishes and loaves.
Too many battles being fought in the ministries at Delhi than the marketplace would sound like a legacy of the licence-permit raj. Both the government and private players must work hard to ensure that ghosts of the past do not rear their ugly heads again.