A recurring story in the mobile business is the danger of overpaying for spectrum, just as an equally-important story has been the potentially crippling cost of failing to obtain spectrum, or enough spectrum to build a positive business case.
That story might be playing out again as India closes its most-recent spectrum auction, which raised a record amount of $17.07 billion, in part because the leading Indian mobile operators all had to reacquire the spectrum they already are using.
Auction proceeds exceeded expectations by about 33 percent, no doubt because the leading mobile service providers had no choice but to ensure they retained use of current spectrum.
Another truism that one ecosystem’s “costs” are another segment’s “revenues.” For India’s government, the money will help address a fiscal deficit.
For India’s mobile carriers, the issue is what will be needed to earn a return on the spectrum investment.
That concern has been raised about costs for AWS-3 spectrum in the United States, and in auctions of 3G spectrum in Europe in 2000, and India, more than once. Spectrum auctions in 2010 raised concerns as well.