Achche Din for Broadband Users in India?

[Topweb]

Stop calling everybody from DMK or Tamil Nadu if he doesn't agree with your opinion. Most economists and financial experts know that Spectrum Auctioning has deeply affected the growth of Telecom industry in India.

I am not defending A Raja or Telecom companies. I don't give a shit about A Raja/DMK or Telecom companies. My point is just that Indian Govt policy of Spectrum allocation was economically and technically wrong.

You are from Tamilnadu. Right?

Point is who is correct? Telecom companies who are spending big money in auctions and have their ass on the line or the armchair analysts quoted by "secular" newspapers like TOIlet paper (TOI)?

 

[Sushubh]

So what exactly is Indian government doing in your opinion to ensure that Digital India reaches the common man? Except for making speeches about it? I mean you seem to agree that making money from spectrum sale is the universal standard and it's telecom companies fault that they did not form a cartel where they should have and demanded spectrum at reasonable prices from the government.

 

[India_King]

Once again, India has expensive spectrum because telcos were willing to bid and pay that price.

Please tell us about a single incidence where anyone from BJP (party of incompetent scum as per you) was seen holding a gun at the head of CEOs of telecom companies and forcing them to submit high bids.

Don't be naive. Look from broader perspective.

BJP didn't allow parliament to function for a year agitating on 2G scam. Then UPA Govt was forced to draft a new telecom policy overnight. No real debate was made about drafting new telecom policy on Spectrum auctions. BJP was fooling people that Auction will bring big revenues. But things are not that simple.

Even at that time many financial experts warned that Spectrum auction is not the right policy for Indian economy. But BJP was busy playing politics on this issue.

After all these years, overwhelming majority in telecom industry have come to conclusion that new telecom policy has been a failure. And its not Rocket science. You make Telecom spectrum 10 times expensive than base price. Than you expect that this won't translate into high price for consumers? Not to mention telecom industry piled up 3.50 Lakh crore debt to buy the spectrum. The have to recover that debt. Don't they? in the end, customer has to foot the bill.

 

[India_King]

I am from Delhi. I am not a Muslim.

Does that make you comfortable? Why you keep accusing me from Tamil Nadu?

 

[Sushubh]

I am a Hindu from Gurgaon. I think spectrum sale is not working out well in this country. Government should give out spectrum for free or reasonable prices in return for guaranteed quality of service at competitive prices. If you want Digital India, you have to at least provide the raw material for it in abundance at reasonable prices.

 

[crashnburn_in]

In an auction the Govt does not choose the price. The companies who bid see market potential and Bid accordingly.

Govt is not wrong to keep spectrum auction. Telcos are wrong to go crazy on their auctions. Competitively screwing each other.

Now, what could have been better?

I would say before the auctions clear definition of what "segments" and "speed/ price bands" of info service should be provided to people.

If ACT/ Beam can provide 10/ 100 Mbps in Bangalore for 5+ years then financial feasability exists if PROPER DUE DILIGENCE is done.

Trigger happy bidding is STUPID on the part of Telcos. Its the equivalent of Financial Crisis of 2008.. Sub prime CDOs had to bust sometime.. But high paid number crunchers being over creative..

Even giving spectrum to telcos at low prices does not guarantee ANYTHING. Telcos will still want to screw people over.
Exxon / Chevron will loot the world on Oil & gas if they can..
Apple will maximize profits on their products on BoM..
Coal blocks sold cheaper doesnt not guarantee lower bills to people..

Left to the Telcos, we would have never seen NetFlix and Hulu... or Prime video.. Hence people are cutting the cable cord.

It needs to start from the side of what kind of QoS / Service price we need to provide to consumers and trace back from that to see what it will cost.. what will the operational/ technical/ financial hurdles be.

BTW - Please dont compare India to Pak or Bangladesh.. Size, Space, Market size and growth of nation is whole different ball game.

What it should involve is proper due diligence on what kind of services must be provided and what kind of price bands. This is something Market, Consumers, DOT, Trai, Telcos and experts need to do... Sit and do an extensive study of what prices & QoS is there in other markets, what issues & cost factors they face.. what factors are there in India and formulate service QoS plans and then trace back to see what it will cost.. What is the band/spectrum worth.. over 3 years, 5 years, 7 & 10.. Potential increases over time.

Bidding must happen after.. proper due diligence. I am guessing thats why JIO is looking at Broadband Services the way no one has.. NetFlix, PrimeVideo, TriplePlay, Single pipe.. all services. Again.. their vision seems on the dot.. and from the people I know working there.. its good.. operationa/ financial due diligence.. I hope is sound..

American telcos went through so many generations of technologies.. lots of costs.. changes.. In India we saved and bypassed a lot of the learning stages.

PS: WIth all above in context.. they are not straight, simple, easy answers.. and stances that people are making it out to be.

Topweb,

You don't know anything. Telecom spectrum is NOT freely auctioned in all countries. Every country has its own Telecom policy and allocation of Spectrum. Go check the selling price of spectrum auctions in developing countries. Price is fraction of the selling price in India. No developing nation has sold spectrum at such exorbitant price as in India.

For e.g Pakistan sold its entire 3G+4G Spectrum for just 6000 Cr Rupees. In India, Govt sold 3G spectrum alone for 70000 Cr.

Similarly selling price of spectrum in Sri Lanka and Bangladesh is peanuts compared to that in India.

Regarding US, UK and other European nations. They are developed nations. Their per capita GDP, income and standard of living is much higher than that of India. Citizens in those nations can easily afford Tariff structures of their telecom providers.

India is a developing state. Large population of this country is poor and isolated from modernization and technology. Hence, affordability of Technology is of prime importance. Stop comparing apple to oranges. India is not like US. So policy that may be suitable for modern industrialized nation like US/UK doesn't mean it is suitable for India.

 

[Sushubh]

So I guess the only option I have to just accept the facts and do not be critical about the government because the whole system is messed up. Alrighty! I should also ignore the fact that only thing that has somehow worked in favor of the consumer was also discarded by the government when they decided to delay the implementation of 2mbps as minimum speeds for wireless internet. I mean telecom operators are already under so much pressure... Why force them to boost their post-fup speeds!

 

[India_King]

In an auction the Govt does not choose the price. The companies who bid see market potential and Bid accordingly.

Govt is not wrong to keep spectrum auction. Telcos are wrong to go crazy on their auctions. Competitively screwing each other.

Now, what could have been better?

I would say before the auctions clear definition of what "segments" and "speed/ price bands" of info service should be provided to people.

If ACT/ Beam can provide 10/ 100 Mbps in Bangalore for 5+ years then financial feasability exists if PROPER DUE DILIGENCE is done.

Trigger happy bidding is STUPID on the part of Telcos. Its the equivalent of Financial Crisis of 2008.. Sub prime CDOs had to bust sometime.. But high paid number crunchers being over creative..

Even giving spectrum to telcos at low prices does not guarantee ANYTHING. Telcos will still want to screw people over.
Exxon / Chevron will loot the world on Oil & gas if they can..
Apple will maximize profits on their products on BoM..
Coal blocks sold cheaper doesnt not guarantee lower bills to people..

Left to the Telcos, we would have never seen NetFlix and Hulu... or Prime video.. Hence people are cutting the cable cord.

It needs to start from the side of what kind of QoS / Service price we need to provide to consumers and trace back from that to see what it will cost.. what will the operational/ technical/ financial hurdles be.

BTW - Please dont compare India to Pak or Bangladesh.. Size, Space, Market size and growth of nation is whole different ball game.

What it should involve is proper due diligence on what kind of services must be provided and what kind of price bands. This is something Market, Consumers, DOT, Trai, Telcos and experts need to do... Sit and do an extensive study of what prices & QoS is there in other markets, what issues & cost factors they face.. what factors are there in India and formulate service QoS plans and then trace back to see what it will cost.. What is the band/spectrum worth.. over 3 years, 5 years, 7 & 10.. Potential increases over time.

Bidding must happen after.. proper due diligence. I am guessing thats why JIO is looking at Broadband Services the way no one has.. NetFlix, PrimeVideo, TriplePlay, Single pipe.. all services. Again.. their vision seems on the dot.. and from the people I know working there.. its good.. operationa/ financial due diligence.. I hope is sound..

American telcos went through so many generations of technologies.. lots of costs.. changes.. In India we saved and bypassed a lot of the learning stages.

PS: WIth all above in context.. they are not straight, simple, easy answers.. and stances that people are making it out to be.

I understand the argument that providing cheap Spectrum to telecom industry does not mean that telecom industry will provide better services to the consumers.

But you didn't read my posts carefully. I recommended two way approach.

Firstly, allocate Spectrum to Telecom industry at reasonable price. NOT via auction. India's telecom industry is underdeveloped and burdening it with costly Spectrum payments will depress the industry.

Secondly, TRAI should continue to raise minimum internet/broadband speed so that benefit of cheap spectrum actually translate into better service to customers. TRAI should strictly monitor QoS of telecom industry to ensure that customers are getting benefit of cheap spectrum allocated to telecom industry.

Basically Telecom ministry should provide resources to Telecom industry at cheap price and TRAI, our regulatory authority, should check that telecom industry is functioning in good faith for benefit of consumer.

And yes, its obvious that our telecom market reacted to Spectrum Auction with needless over excitement. They didn't considered the future of operations carefully. Now Telecom industry crying that their Balance sheets are full of Debt which will takes years, if not decades to get paid. I think Telecom industry would've rejected the auctioning process. India never had real discussion and debate about our Telecom policy. They're making fixes as they're going along. Like trying to repair a broken car while its still moving.

 

[neeraj0272]

Auction means outbidding others. Outbidding others to capture a monopoly over a resource. A resource such as spectrum with no other alternative would obviously make profit-seeking companies salivate and make them bid with their eyes closed and that's what has happened. Now you can say that companies were at fault to bid at unreasonably high prices but the fact is that consumers are suffering for this rash and greedy act of companies and govt. I can see that whereas 1gb of 3g data which was available at Rs. 150 earlier is now being sold at minimum Rs.250 by mobile companies now. Even 2g data is being priced almost same as 3g data. In prepaid sector no top up with 28 days validity is available for less than Rs. 200!
Compare this with the mobile hardware industry where no auction route is being followed by govt. Mobiles are getting cheaper and better by the day even in the face of mounting Dollar!
People here advocating auction route might as well advocate auction for all other resources like water resources or the air we breathe or auctioning of parking space etc as well. I am sure it will fill govt coffers and govt would use this money for welfare of common man!

 

[India_King]

Even Arun Shourie who was once the economic/financial brains of BJP mocks the auctioning process.

This type of process is suitable for developed, matured and industrialized economies. Not for underdeveloped emerging economies.

All right. Bygones be bygones. We have to keep aside dirty politics played on our telecom policy. BJP Govt should now have courage to admit that expensive Spectrum is curbing growth of industry. Hence it should put moratorium of pending 3G/4G spectrum fee payments. Moratorium should be for 5-10 years.

TRAI can make sure that telecom industry is transferring the benefits to consumers by strict monitoring and elevating the QoS standards of telecom companies. Like continuing to raise minimum broadband/internet speed. Introducing minimum speeds guidelines for EDGE/3G/4G etc.

Telecom industry is part of IT sector. And IT sector growth can achieve rapid growth if right policies are implemented. But our foolish politicians are busy playing politics while ignoring national interests. Lets see if Modi is serious about Digital Indian campaign. Only giving Bhashan/Pravachan won't bring Digital revolution. Time to Act!