5G Spectrum - JS Deepak has a Counter-thesis: India didn’t really auction spectrum, and its still charging too much for it Rs 1,50,173 crore ($18.9 billion).
That’s how much revenue was generated through the recently concluded auction for 5G telecom spectrum. This is reportedly the highest amount India has collected, not only through spectrum auctions but also through the bidding for any national natural resource such as land or coal or power.
So, a super successful auction then. Yes, if you go by the rah-rah media coverage. But…
“The 5G spectrum allocation exercise was not an auction in the true sense,” JS Deepak in an interview chock-full of counter intuitive views. And Deepak is more than qualified to hold such views considering he is a former secretary at the Department of Telecom (DoT) and the architect of India’s first spectrum auction in 2010.
Indian Telcos bought nearly all of the radio spectrum on offer this year at exactly the reserve price, not a penny more, not a penny less. By contrast, in the 2010 auction, points out Deepak, Telcos bid up to 4-5X the reserve price to generate $24.5 billion in revenue upfront, which was about 12X the price charged for 2G spectrum.
In fact, he is of the opinion that the spectrum price was too high this year. Unsurprisingly a lot of spectrum remained unsold, including in the critical 700MHz band, which Deepak says could end up being detrimental to both 5G coverage and competition between Telcos.
Speaking of Telcos, Deepak considers them nearly as much of a national resource as telecom spectrum. And this comes across strongly when he speaks about the “disappointing” decision to allow enterprises to build their own private networks.
“There’s a slight difference between a family and a country. In a family, if you have three children, you allocate resources equally among them. In a country, the government needs to support the most effective and the most efficient player.”
Conclusion : That’s the Telcos, an interview under our new series: A 'Counterthesis'
