3G Mobile Services might Come at a High Cost

In around six months’ time, no less than four telecom firms in your region are going to approach you requesting you to sign in for their third-generation (3G) mobile services.

These mobile operators, together with Bharti Airtel, Reliance Communications, Vodafone Essar and Tata Teleservices, have come out as winners in the recently wrapped up auction, which continued for 34 days.

They have settled to collectively pay as much as Rs. 67,718 crore to the Government for purchasing the spectrum which’s needed to provide 3G services.

Mobile Phone NetworkFor instance, Vodafone will shell out virtually Rs. 11,500 crore for airwaves in nine circles whilst Reliance Communication was successful in getting 13 circles for Rs. 8,585 crore.

But now the worry is whether these operators, in their anxiety to acquire more spectrum, have overbid and as a consequence will the customers have to cough up a larger fee for getting all the facilities that 3G technology carries?

The fears are not unsupported since alike auctions carried out previously in Europe concluded with operators citing enormous amounts leading to high tariffs.

A swift comparison with worldwide yardsticks on Dollar/MHz/Population reveals that Indian operators have to shell out $5.5 per Mhz per populace for Metros regions, which is the same level that touched during auctions in the UK and Germany.