Why spectrum needs a change in approach

Source: The post is based on an article “Why spectrum needs a change in approach” published in The Indian Express on 29^th October 2022.

Syllabus: GS 3 – Growth and Development

News: The government has recently released the draft Indian Telecommunication Bill, 2022. It will replace the colonial era Indian Telegraph Act, 1885. The draft bill includes spectrum policy.

The spectrum policy in India is not up to the mark and it has failed to provide meaningful connectivity to all citizens.

What draft Indian Telecommunication Bill, 2022 say?

The bill aims to improve the accessibility of the spectrum and enhance its benefits. This will ensure better connectivity to all Indians and will help in reducing the digital divides.

The draft bill refers to the spectrum as a public good and an inexhaustible resource. However, spectrum being an inexhaustible resource has some technical limitation and its recent cost in auction has also raised concerns.

What are the concerns associated with spectrum?

The cost of spectrum is one of the major concerns.

Since 2010, the government has consistently used auctions for spectrum allocation and except the 2010 auction all other auctions saw a grim response from the buyer due to the high cost.

According to one estimate, at 7.6 per cent of the aggregate revenue of the network operators, spectrum cost in India is amongst the most expensive in the world.

This impacts the investment in network upgradation and infrastructure of the network operators which finally result in poor quality services.

The recent auction of the spectrum was sold at reserve price due to bring down the cost of the spectrum but this also has issues.

There are chances of unsold spectrum due to the high reserve price which will affect the revenue of the government and in turn it will affect the quality and quantity of the services in certain areas.

Moreover, the licences and spectrum are assigned for specific service areas which are mostly identified by the state boundaries.

But the operators mostly focus on urban markets and the spectrum in remote areas remains unutilised due to a lack of investment in infrastructure by the network operators.

How does draft bill provide the solution to problems of spectrum?

The draft bill includes the provision on the spectrum such as use it, share it, or lose it. However, it needs innovative support to be successful.

The draft bill also provides solution to unsold spectrum by supplementing auctions by administrative allocation, and any other manner as may be prescribed by the government. Thus, ending the process of auction.

What steps can be taken by the government?

First, Government should come up with a different approach towards bridging the digital divide between the rural and urban areas as the cost to revenue ratio is low in the rural areas.

Second, the unutilized spectrum of the licesened operators can be given to local entrepreneurs who are better in understanding the local needs. This will ensure better services along with development of local entrepreneurs.

Third, the government can explore innovative methods of spectrum access such as a non-competitive licensing framework for certain specific cases.

Fourth, the idea of niche operators providing services to telecom operators and manufacturers needs revival and spectrum should be combined with other infrastructure to enable better service delivery.

Fifth, the government should build an ecosystem that enables transparency in moving away from auction along with a reasonable price for operators and strict service obligations.

Sixth, there should be no unsold spectrum and niche operators should be encouraged to get involved in the auction.