Trai may hold discussions on new method to fix spectrum base price

6pack

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Source: https://economictimes.indiatimes.com/industry/telecom/telecom-news/trai-may-hold-discussions-on-new-method-to-fix-spectrum-base-price/articleshow/67265224.cms

High base prices for spectrum at auctions, going back to 2010, have been a major contributory factor in the telcos running up debts of around Rs 7 lakh crore.

Trai’s methodology has historically resulted in the spectrum prices in India being among the highest in the world. For example, price of the 600 MHz band sold in the US last year was around Rs 3,500 crore a unit, while the initial price of the 700 MHz band in India in 2016 was set at nearly Rs 11,500 a unit. No telco touched the band in the October 2016 sale. And more recently, Trai’s proposed base price of Rs 492 crore per unit of 3500 MHz 5G spectrum is much higher than Rs 65 crore per unit at a recent 5G auction in Korea, which may limit participation in this band as well in the next sale, said analysts.
Now you know whom to blame for increasing prices of mobile fees...
 

adventureguy

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historically financial analysts have been shouting from rooftops that spectrum prices are out of this world. but governments (UPA-I I believe) wanted that sweet sweet dough, went ahead and sold the spectrum at highest prices. Not buying spectrum means telcos will fall behind competitors like telenor did. so they went ahead and bought them at high prices.

world's highest spectrum prices along with one of world's lowest call rates. It doesn't take a financial guru to see that would lead to huge debts/shitty call quality and unreliable service
 

Julian

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Can someone ELI5 how a government owns and can charge for electromagnetic radiation (rather, the use of it)? I mean i'm interested in the logic/reasoning behind it?

Obviously there has to be some kind of regulation in allotment, else it would be a free-for-all with overlap/interference, but charging for something that's essentially free? Like air?
 

rdst_1

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I feel the high prices are justified because of the much higher number of subscribers/customers available in India for the telcos compared to that in US or other countries. Our high population and even higher density of population means that the telcos have a much higher subscriber base to make money off and hence should rightly be charged higher in spectrum fees as they are one time money making opportunity for the govt.