Finally, there is one economic Newspaper that has justified the price of spectrum in the current auction. Financial Express (FE), in its editorial, has said that “Bharti Airtel and Vodafone have bid aggressively not just to retain part of their 900 MHz spectrum, but have also bought significant amounts of 1800 MHz spectrum, the reason goes beyond the need to protect their existing customer base.”

FE has rightly argued that the reason for aggressive bidding was the potential of data services in India.

B K Syngal, in his series of articles in TelecomTiger, has also justified the price discovered through auction process. It is clear the government has managed to get right price of spectrum. Syngal has argued that even if high price of spectrum is passed on to the consumers, increase in tariff will not be more than four paise per minute. Ankur, one of our esteemed readers, has calculated that increase in price will be 5.55 paise per minute.

FE editorial says “that data services are growing by leaps and bounds while growth in subscriber minutes for voice has levelled off from 54% in FY09 to 9% in FY13 across the country. For Bharti Airtel, ‘data’ subscribers have risen from 35.8 million in September 2011 to 54.4 million in December 2013. Their average data usage has shot up from 107 MB to 249 MB in the same period and average revenues per user from R44 to R75—in just the last five quarters, the share of ‘data’ as a proportion of mobile revenues rose from 4.9% to 10.3%.”

As far as increase of tariff is concerned, it should not be more than five paise, if one goes by pure economics (Please read Syngal’s articles in Telecomtiger). Tariff will finally be decided by the competition.

Links of Syngal's articles: Paid media and analysts are misleading public and the government by calling the current auction “winner’s curse”, writes B K Syngal Paid media and analysts are misleading public and the government by calling the current auction “winner’s curse”, writes B K Syngal

B K Syngal blasts Economic Times on spectrum auction coverage, wonders whether the newspaper is trying to create unnecessary panic

Are Newspapers trying to influence spectrum auction negatively so that manipulators can bring down stock prices, asks Syngal

Telecom operators want everything free in the name of consumers, comments Syngal on spectrum auction

Link of FE editorial: Editorial: Spectrum of destruction