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Hahahhaha. First cry hoarse about loss of revenue and corruption and now cry about big mobile bills. Now blame the govt for killing the telecom revolution. I have been saying from day one, 2G was not a scam when it was not auctioned. Scam or corruption part was when money was made under existing policy and rules by showing favoritism.
Abhi bhukto sub.
_______________________________
Prepare for inflation to catch up with an area relatively immune to it so far - your telecom bill. Government policy is set to raise the price and possibly also lower the quality of an important productivity tool that had empowered the masses. The cabinet has decided to fix the base price for auction of 2G spectrum for GSM operators at a whopping Rs 14,000 crore, and that for CDMA operators at 1.3 times that amount. Shockingly, the GSM reserve price is four times what had been fixed for 3G services, meant for higher-end consumers. It should be remembered that 2G spectrum is for basic services such as voice, used by all classes of Indian society.
Step up auctions with high reserve price, which push up resource prices artificially and make discovery of true market price impossible, have never been very helpful to business or consumers. This is because high prices of auctioned inputs like spectrum will hike retail prices of final products and services and restrain overall improvements in productivity and efficiency of the economy. They amount to rent extraction by the government, which may swell revenues in the short term but also kill it in the long term if the sources of economic growth are undermined. Auctions of this type also allow very large and established companies to bid exorbitant prices and monopolise control over scarce resources, inhibiting the entry of new and innovative entrants. With competition absent, such companies are left free thereafter to squeeze consumers badly.
Due care needs to be exercised as India's experience with auctions hasn't been particularly encouraging. The first auction of telecom licences in the early 1990s - which led to excessive bids by operators and huge accumulated revenue arrears to the government - forced a migration to a revenue-sharing regime. And the more recent 3G spectrum auction has dented the rapid growth of services. Similarly, the outcome of the bids for oil exploration rights or running airports is poor. It's unlikely that the experience of the new round of spectrum auctions will be any different.
Telecom is now a basic developmental input, like roads and power. And the telecom revolution has been a major tool for empowering disadvantaged groups and promoting inclusive growth. Snuffing it out now is a luxury that neither the country nor the UPA government can afford.
The Times of India on Mobile
Abhi bhukto sub.
_______________________________
Prepare for inflation to catch up with an area relatively immune to it so far - your telecom bill. Government policy is set to raise the price and possibly also lower the quality of an important productivity tool that had empowered the masses. The cabinet has decided to fix the base price for auction of 2G spectrum for GSM operators at a whopping Rs 14,000 crore, and that for CDMA operators at 1.3 times that amount. Shockingly, the GSM reserve price is four times what had been fixed for 3G services, meant for higher-end consumers. It should be remembered that 2G spectrum is for basic services such as voice, used by all classes of Indian society.
Step up auctions with high reserve price, which push up resource prices artificially and make discovery of true market price impossible, have never been very helpful to business or consumers. This is because high prices of auctioned inputs like spectrum will hike retail prices of final products and services and restrain overall improvements in productivity and efficiency of the economy. They amount to rent extraction by the government, which may swell revenues in the short term but also kill it in the long term if the sources of economic growth are undermined. Auctions of this type also allow very large and established companies to bid exorbitant prices and monopolise control over scarce resources, inhibiting the entry of new and innovative entrants. With competition absent, such companies are left free thereafter to squeeze consumers badly.
Due care needs to be exercised as India's experience with auctions hasn't been particularly encouraging. The first auction of telecom licences in the early 1990s - which led to excessive bids by operators and huge accumulated revenue arrears to the government - forced a migration to a revenue-sharing regime. And the more recent 3G spectrum auction has dented the rapid growth of services. Similarly, the outcome of the bids for oil exploration rights or running airports is poor. It's unlikely that the experience of the new round of spectrum auctions will be any different.
Telecom is now a basic developmental input, like roads and power. And the telecom revolution has been a major tool for empowering disadvantaged groups and promoting inclusive growth. Snuffing it out now is a luxury that neither the country nor the UPA government can afford.
The Times of India on Mobile