DoT has  refused to learn from past failures to sell spectrum and adjust pricing accordingly
file photo

Spanish philosopher George Santayana said, “Those who cannot remember the past are condemned to repeat it”. The department of telecommunications clearly has difficulty in remembering the past, leave alone learning any lessons from it. It has announced that auctions for 4G spectrum in the 700, 800, 900, 1,800, 2,100, 2,300, and 2,500 MHz bands will begin from March 1. Licence-holders have until February 5 to submit their applications.

So far, so good, but the reserve price has been kept unchanged at Rs 3.9 lakh crore, a price that had first been estimated in 2018. Since then, the telecom landscape in India has changed almost out of all recognition. More than half the players who were present in 2018 are no longer in business today. The sector is struggling under a debt mountain of nearly Rs 5 lakh crore. In addition, there is the Rs 1.6 lakh crore to be recovered under the ‘Adjusted Gross Revenue’ formula, which case the telcos lost in the Supreme Court. As if this is not enough, there is the sword of the tax demand under the retrospective amendment hanging over Vodafone.

In such a scenario, it is likely that the past scenario will replay itself. The last spectrum auctions were held in 2016, when the government offered 2,354.55 MHz at a reserve price of Rs 5.60 lakh crore. However, bids worth only ₹65,789 crore were received, with the 7,000 MHZ band finding no takers due to the price. In fact, with the exception of 2015, all auctions over the past decade have failed to find buyers for more than 40 per cent of the spectrum offered on an average.

Nevertheless, possibly spurred by fears of potential charges of a scam, the DoT has resolutely refused to learn from past failures to sell spectrum and adjust pricing accordingly. With the telecom sector struggling with intense competition, high debt and low average revenue per user, it is unlikely that the Centre’s cash registers will start ringing this time. Telecom is a basic need and a growth driver. The government cannot simply treat it like a cash cow.

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