2G spectrum for Sale?
Posted by tggokul on August 11, 2007
Economic Times reports that Ministry of Finance ( hopefully with the consent of Ministry of Telecom) is pushing for the sale of 2G spectrum. What they are recommending is having a fixed fee model or an auction system through which the operators can bid for the spectrum.
The finance ministry hopes that this would enable effective utilization of resources. The operators, since they are paying for this, would pursue new technologies or improve existing ones since they have to get an RoI. This is the thinking of the ministry of finance. As of today, the operators pay an entry fee for 2G, but subsequent allotment of resources is free. A committee has been set to price the spectrum and the result of this will be out soon.
The CDMA guys are the major proponents of this because they feel cheated since the licensing model entitles GSM operators 6.25 MHz of free 2G whereas the CDMA guys get only 5 Mhz. The next few weeks ( till the committe comes out with its recommendation) are going to be quite interesting and it remains to be seen whether Reliance ( CDMA provider) can uses its political clout to get this done.