Wednesday, June 01, 2005

To Pay or not to Pay ?

on Rediff

Call it the great 3G spectrum rip off. Or call it a short-sighted bid to garner money for the government. Howsoever mobile services companies see it, one thing is clear -- a huge controversy has erupted, with the mobile services industry split down the middle.
The bone of contention? Should the government charge mobile services companies for providing 3G (short for third generation) spectrum (or the airwaves through which mobile phone services are provided -- in this case, mobile services which will offer high speed Internet services and data services)? Or should spectrum be free?
The row broke out a fortnight ago when Tata group chairman Ratan Tata shot off a letter to Communications Minster Dayanidhi Maran urging that 3G spectrum should be paid for.

TRAI and Dhayanithi Maran have a big task at their hands leading India to a 3G nation.

Argument : Giving free 3G spectrum will help in promoting rural telephony
Counter-Argument : Even the current spectrum is underutilised. Talking about using 3G is rubbish

A: Paying for 3G would increase cost to the consumer
CA: Reliance and other GSM operators came in by paying huge fees. But actually brought down prices.

A: Auctions in Europe led to over-bidding and companies went bankrupt.
CA: Auctions were not held properly in Europe. Anyway, Indian operators are experienced enough not to overbid.

A: Paying for 3G spectrum will choke the growth of operators.
CA: 3G spectrum is an economic resource and makes no sense to give it away free.

And the argument continues ......

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