Lessons from India on the Role of Institutions in Spectrum Trading

Abstract

Mobile phones have had one of the fastest adoption rates for any technology globally. Mobile services and mobile broadband have contributed to the economic growth and are increasingly seen as vehicles for development, especially in developing countries. As is the trend globally, spectrum has become a critical resource for further growth in the sector, especially with greater demand for data. The environment and hence the context of spectrum management varies significantly across developed and developing countries. Spectrum management in most developed countries is driven by the need to make the telecom sectors competitive and exploit technological advances for innovative cutting-edge services. The citizens and enterprises have a high propensity to pay. This is in an environment where there is near universal coverage of high-end services, both on wired and wireless infrastructure. On the other hand, in developing countries, wired infrastructure for broadband and backhaul services is very limited. In the wireless domain, supply side constraint of low spectrum availability prevails, as often institutional mechanisms for refarming, trading and sharing are inadequate. On the demand side, operators are obliged to serve large populations who are unable to migrate to newer technologies due to high cost of devices and services and lack of digital literacy in the population. The customers also have a lower propensity to pay, thus making it commercially demanding for operators to introduce new technologies. Most developing country leaderships also recognize that growth in broadband and economy is a twosided relationship. (...)