Evaluating Spectrum Auctions in India

Abstract

The evolution of mobile communication technologies has been nothing short of phenomenal. After introduction of the first generation network in the early 1980s, we are now knocking the doors of fifth generation communication systems that are designed to deliver ultra-fast internet and multimedia experience for customers. Communication airwaves, also known as radio frequency spectrum are an important resource for mobile communication technologies. It is a subset of frequencies in the electromagnetic spectrum that can be used for communication, and corresponds to frequencies from 3 kHz to around 300 GHz. From mobile phones to police scanners, TV sets and radio, virtually every wireless device is dependent on access to wireless spectrum. However, radio spectrum is not uniformly applicable, physical and natural conditions can constrain its application to some technologies. To optimize its use radio spectrum is divided into bands of varying frequencies. Usually, low frequency spectrum is preferred for better propagation characteristics, while high frequency spectrum is deployed to push greater volumes of information in each frequency band. While spectrum is not depletable, technology can limit the extent to which it can be beneficially utilized at a point in time. Governments typically license the use of spectrum to regulate its application and maximise social benefit. With the exploding demand for all things wireless, radio spectrum has become a scare commodity in many countries. In India for instance, aggressive bidding during auctions (2010, 2012 and 2015) led to dramatic increases in spectrum prices. Spectrum management policies have been relaxed over time to ease pressure on operators and encourage spectrum efficiency. In 2017, the average spectrum holding for an operator in India was 31 MHz, compared to the global average of 50 MHz. (Figure 1.1). The National Digital Communications Policy (NDCP) 2018 formulated recently sets out policy objectives to optimize the availability and utilization of spectrum. The key areas of policy action include developing a transparent and fair policy for spectrum assignment and allocation, making spectrum adequately available for the upcoming broadband era, allowing for its efficient utilization and promoting next generation access technologies.