Spec­trum Charges

Voice&Data - - VOICEMAIL - Dr TH Chowdary

Some of the li­cences for cel­lu­lar mo­bile tele­phony will come for re­newal from next year on­wards. The tele­com reg­u­la­tory au­thor­ity of In­dia (Trai) seems to have rec­om­mended a very steep, five­fold in­crease in the spec­trum charges for the 2G ser­vices when they come up for re­newal. It is the low-spec­trum charges and mi­gra­tion from up­front fixed li­cence fee pay­ment to rev­enue share that have un­leashed the ex­plo­sive growth of cell tele­phones in our coun­try. Tech­nol­ogy and com­pe­ti­tion have brought down prices to such lev­els that could be af­forded by even the so-called poor peo­ple who buy pre­paid (within their af­ford­able means) ser­vice, an in­no­va­tion the pri­vate tel­cos in­tro­duced. We have over 850 mn cell phones, grow­ing at over 10 mn per month.

An in­crease in the spec­trum charges will add to the cost of the com­pany. The prof­its of the cell phone com­pa­nies have been com­ing down quar­ter af­ter quar­ter. They may soon run into losses. If the spec­trum charges are in­creased, losses will also in­crease. The com­pa­nies would be forced to raise prices and their mar­ginal sub­scribers mainly in ru­ral ar­eas may drop down. This out­come is un­de­sir­able.

It is un­der­stand­able as to why the reg­u­la­tor and the depart­ment, both of which should plead for consumer wel­fare, are com­pet­ing with one an­other to raise rev­enues to the govern­ment by en­hanc­ing costs like that of spec­trum. The grow­ing rev­enues to the govern­ment from this sec­tor had not been spent for pro­mo­tion of broad­band for all ed­u­ca­tional in­sti­tu­tions and pub­lic fa­cil­i­ties like hos­pi­tals, rail­ways, and bus ter­mi­nals. Nearly 20,000 crore col­lected from the P-tel­cos as Uni­ver­sal Ser­vice Fund is ly­ing unuti­lized. Even if a quar­ter of this had been spent to pro­mote R&D, we would be hav­ing an in­dige­nous de­sign, de­vel­op­ment, and pro­duc­tion for tele­com and IT equip­ments in­stead of imports of about 40,000 crore for this sec­tor.

Rais­ing rev­enue and adding it to the gen­eral bud­get to be spent on pop­ulist wel­fare mea­sures is no virtue. En­hance­ment of spec­trum charges can have a redeeming fea­ture only if the additional rev­enues to be raised are uti­lized only in the tele­com sec­tor for R&D and for ex­ten­sion of broad­band to all over In­dia. Pa­tri­otic cit­i­zens must be con­cerned with the griev­ous ne­glect of in­ter­nal se­cu­rity, de­fenses of the coun­try, and in­fra­struc­ture like roads and ed­u­ca­tional in­sti­tu­tions be­cause the rise in rev­enues are wasted by dis­tribut­ing much of it for ques­tion­able ‘wel­fare’ schemes like NREG, old age pen­sions, 1 per kg rice, fee re­im­burse­ment, waiver of loans, (no in­ter­est loans to women (writ­ten off be­fore elec­tions). Fifty to eighty per­cent of the money spend as ‘wel­fare’ is trans­formed into black money, shared be­tween busi­ness­men, govern­ment ser­vants, and politi­cians. There­fore pa­tri­otic peo­ple and in­sti­tu­tions like the reg­u­la­tory bod­ies should not be too ea­ger to gen­er­ate rev­enues for squan­der­ing by the pop­ulist gov­ern­ments.

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