Consumers and their Role In the Spectrum Auction

Consumers are individuals who utilise or consume a product or service and provide feedback based on their requirements, necessity, and working conditions of that particular service. The most common consumers in the modern world are telecom companies. These companies are consumers of airways, i.e., the medium through which the propagation of signals can take place. The government holds a spectrum auction to sell airways to a particular telecom company so that the propagation of their signals can occur without any interference. Telecom consumers use these 5G spectrums in India and provide feedback on the necessities, limitations, and methods to improve the auction.

Consumers

Consumers are individuals who have the essential role of evaluating, using, and giving feedback on their services. Consumers have the right to implement their opinions on a particular service to satisfy their needs and requirements. Consumers are generally classified into two categories, household consumers and industrial consumers. Household consumers are individuals who purchase a product for their personal use. In contrast, industrial consumers buy a product or obtain a service and evaluate its working based on the requirement, need, and a necessity according to the growing generation.

Spectrum

In the modern world of Internet and connectivity, every device, such as a smartphone, Wi-Fi router, radio, etc., requires a particular range of signals to connect it from one device to another. The medium in which these signals flow is called an airway. Airways are set at a particular frequency to prevent interference in signal propagation. Airways with different frequencies are called a spectrum. The range of the frequency of the spectrum is categorised as bands. Bands with multiple repetitions of waves at a particular time are called high-frequency spectrums, while those with slow repeating waves are called low-frequency spectrums.

Spectrum Auction in India

Spectrum auctions refer to the selling of airways, i.e., the spectrum for the propagation of the signals. It is a well-known fact that most services are owned and controlled by the Union government. Similarly, the government owns the spectrums, and the Department of Telecom sells these spectrums. The government has divided the entire airways into telecom circles, and there are 22 telecom circles at present. With an increase in modernisation and Internet connectivity, every telecom industry requires more area for signal propagation. For growth in the telecom sector, the government places these spectrums on auction so that a particular company can purchase a specific location, i.e., a telecom circle.

Limitations of the Spectrum Auction

There have been several limitations to the spectrum auction in India. These include:

1. The spectrum auctions are not direct selling and purchasing points of a business. They are a bidding competition where telecom companies place their bid, and the highest bid wins. This has limited the number of buyers because even the lower band spectrum of 700MHz can now cost up to 1.97 Lakh Crore.
2. Despite the growth of India’s 5G spectrum auction, there is no explicit discussion over the spectrum allocation reserved for 5G auctions. Therefore, there is less clarity about future spectrum auctions.
3. These auctions are charged with high upfront fees, which are barriers for telecom companies to participate in them.
4. The spectrum auctions in India–including the 5G spectrum auctions–do not have a proper framework. This prevents several companies from taking part in the auction.

Consumer Approach to the Spectrum Auction

Per consumer requirements, feedback and opinions were collected regarding the spectrum auctions. Some consumer approaches to be implemented in the spectrum auctions are:

1. Preventing interference in the propagation of signals to ensure the smooth transmission of services.
2. The spectrum auction must be held more frequently to determine a perfect value for airways and create a healthy spirit among the telecom companies buying airways.
3. A proper 5G spectrum auction in India must be ensured as the development from the 4G to 5G is an excellent step for India.
4. Setting up a spectrum auction before the expiry of its licence is essential to prevent hassles and chaotic situations.
5. The issue of India’s growing population must be tackled to provide more space in the airways for the propagation of signals for future populations. As per records, India could surpass China’s population and become the most populated country globally.

Conclusion 

Consumers are individuals, entities, or companies that use a particular service. Airways with different frequencies are called a spectrum. The most important requirement of a telecom company is to acquire spectrum for the propagation of signals so that each consumer can receive its services. To obtain a high-frequency medium, telecom companies must bid for a higher value in the spectrum. The spectrum auctions in India–including the 5G spectrum auctions–do not have a proper framework. This prevents several companies from taking part in the auction.