Finally, the auction of spectrum required to launch 3G services in India is being held. The Governments decision to delay the auction by over a year and half seems to be yielding results. In the seventh day of bidding, the minimum revenue from the spectrum sale has already crossed over $5 billion. This does not include the value the govt. will earn from the auction of spectrum for broadband wireless services. The online auction could last one more week, eventually, the govt. could end up richer by $7 to 8 billion from the sale.
Most telecom operators in the fray for 3G spectrum have already upgraded their equipment to meet 3G standards. After paying the hugh license fee, each operator would like to start generating revenues as quickly as possible. They could easily launch services within 3 – 4 months of receiving their licenses, which means by Sept – Oct 2010, India would see proper 3G services across the country.
3G allows high speed data to be transferred through GSM / CDMA compatible phones. Besides voice calls, 3G users can make video calls, watch TV on their handsets, access high speed internet to receive emails or download music tracks etc. Operators can expect higher revenue per user ( RPU ) which is the basis of their stock valuation. Along with the launch, there will be additional revenue generation from sale of 3G compatible handsets. It will also create a hugh market for second hand 2G phones that will get pushed to smaller towns and villages.
With the launch of Broadband Wireless Internet, for the first time, Internet users across India will not be dependent on messy cables and poor infrastructure. Also, average broadband speeds are expected to increase from the 256Kbps now to over 1Mbps. Easy wi-fi access and high speed internet are expected to double India’s broadband internet users within the next 2 years.
With higher consumer spending and revenues in the govt’s coffers, the telecom sector will provide a boost to the nation’s economy !