Opinion | A call for the Centre to foster competition

By upholding the view that all revenue accruing to telecom companies be used as a base for determining the portion they need to share with the government as licence fee, the Supreme Court last week appears to have delivered a crushing blow to an industry teetering under a mountain of debt piled up to purchase spectrum at exorbitant prices and roll out some of the cheapest cellular services to be found anywhere in the world. The additional liability of ₹1.3 trillion on account of the revised licence fee, accumulated penalties and spectrum usage charges, all included, could fundamentally alter the scope of competition among Indian cellular service providers that have accumulated, by some accounts, ₹7 trillion in debt, principally to pay for radio frequencies won in auctions. The government, on its part, is mindful of earlier judicial interventions in an allocation policy that once ran the risk of underpricing this scarce natural resource. Various approaches have been tried and the settled view is that the most transparent way to allot spectrum is through a bidding process.