Considering that India needs huge sums of money to fund its infrastructure projects, it would be a good idea to lock the spectrum auction proceeds for creating infrastructure.

There are several issues in the telecom sector that need attention. These in-clude questions related to the powers of the Telecom Regulatory Authority of India (TRAI) itself. The Ministry of Finance has recently taken the posi-tion that recommending the pricing of radio spectrum is not a regulatory issue. The MoF is of course approach-ing the issue as a revenue raising exercise. It has taken the position that 3G spectrum should be allocated on the basis of an auction and the sum should accrue to the non-tax revenue receipts of the government. This seems reason-able from several angles. For one, the center is cash-strapped and the sums raised through competitive bidding for the spectrum could be utilized for other purposes. Further, in an open economy, price is a function of demand and supply. If the CDMA operators are willing to bid for the 3G spectrum, there is no reason why it should not be charged. What is not acceptable and even criminal is that the 3G spectrum should be blocked only because of the battle between the GSM and CDMA operators.

3G stands for Third Generation mo-bile services. 3G in the GSM world is also called UMTS (used in Europe) or WCDMA (used in North America). Both are synonymous. They offer up to 2 Mbps in theory, but experts say that it will translate into about 400 kbps being available in reality. However, even at this level, it is about 400 times larger than the 9.6 kbps offered by GSM phones in general at present.

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