Why not auction 2G/3G or even 4G based on which company offers the lowest tariff ?

naveen_reloaded

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[OP]
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Sep 2, 2007
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Why not auction 2G/3G or even 4G based on which company offers the lowest tariff and give the spectrum as free ?

At the end of the day , isnt it about how a particular resource is useful to people ? Ofcourse Govt can tax to gain from the service.

Reddit link here
 

mgcarley

Founder, Hayai Broadband
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Jun 22, 2009
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Government needs to ensure there's plenty of money to keep bailing out BSNL, and at the end of the day, government already takes 2 or 3 different taxes from each subscriber anyway: you only see the service tax charged to you by the provider, but the provider has his own taxes to pay as part of the cost of doing business (corporate tax & license fees, to name but 2... and lets not forget heavy duties when we import equipment, right of way and other basic costs of operations).Some days I think government wants telecom providers to operate as charities - Government says "GIVE CUSTOMERS LOWER TARIFFS!!!" in the media, but to operators they issue notices to the effect of "oh yeah, by the way, we're increasing the license fee (payable quarterly in advance) from 6 to 8.5%".Guess they're not supposed to do necessary stuff like buy/upgrade equipment, build or maintain networks or pay staff - and with the number of reasonably large operators behind on things like wages at the moment, one has to wonder... I mean, if it's an incentive to use BSNL's backhaul and delivery networks for services, just say that instead of giving with one hand and taking with 2 hands.
 

naveen_reloaded

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[OP]
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they can do the same with taxes. deployment of service is important since it enables the govt to tax the users
 


Toocool

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Eerrm, because companies won't like it? It's not that we are living in a great country which runs on idealism. Money and power is driving the whole world and India is no exception, no company likes it and no government either, the money that comes from auction goes to Switzerland or something like that :p
 

Sushubh

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lol. i am not sure about other states but my dad was in the excise department and they auction liquor shops on an yearly basis. so business people bid on strategic locations for setting up their liquor shop for the next 12 months. and the price goes up to 2-3 crores for some locations. so basically, the store owner has to recover that money in addition to all the other expenses before he can generate a profit. our government is not in the business of doing shit that benefits the common man (unless he is a vote bank). taxes on ciggies go up every year. if they were for the benefit of the common man, they would have banned sale of liquor and ciggies long long time ago.
 

Toocool

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I recently came to know that LIC... Being a public sector company has huge investment in ITC shares :eek: Whose core business is cigarette selling, which according to government kills people. CAN YOU IMAGINE? :confused:A company selling life insurance policy and buying share of a company making life threatening products :mad:
 


Sushubh

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something about ITC. :D they sell classic ciggies pack for 116 bucks. but they sell the imported brand lucky for 100 bucks. classic i believe is their own brand and is manufactured locally. while lucky is an american brand and is probably manufactured under a license. it is even more ironical that lucky was launched in india 110 per pack. and it was dropped to 100 bucks at a later stage. perhaps the only case of a ciggie brand going cheaper in a long long time?
 

Toocool

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Well I only smoke black once or twice in a month that comes for rs 8 a piece I guess :D so I wouldn't know.
 

naveen_reloaded

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[OP]
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can we get back on topic ?

from reddit :

No because whatever price they would agree too, there is a possibility that it can be still lower.

Remember the early days when when incoming calls were also charged, it would have been very reasonable from that perspective to offer the license to somebody who charged 25p/min instead of the 50p/min or Re1/min even.

What are you basing you conclusion on that prices are going to rise due to current spectrum costs? Telecom companies will try to get the best deal and will use all sorts of bluffs to get the best deal but it is in their best interest to keep the prices competitive and focus on volume rather that increase margin and serve lesser number of people.

Technology adaptation and migrating to newer technology would be made easier , once when the wagon (spectrum) is made available free. I do remember those days , although i am not saying incoming in those days wouldnt be charged , but it would have been less , if the spectrum was given as free.

Yes , telecos will do all the tricks. Thats why open the auction like

Tarrif :

Over the period of :

, so lets say airtel pitches at 100MB/1 RS for 3G over a period of 10 years , while Tata can auction for 100MB/0.5P for 3G data, so it goes on. In the end , with fair auction , people will be beneficial of the spectrum , and telecos too would have to expand their reach (deployment in rural areas) for ROI within their said 10 year period.

Instead , when the spectrum is auctioned , not only it will be hindrance in deployment , due to high cost of investment in spectrum , telecos cant afford to lower their price , particularly in the initial period , coz the newer technology might catch them later and ROI could be jeopardized . In this scenarios , rural areas of city of lesser adaptation will be at loss and might never able to get newer technologies.
 

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