Wireless is the way

Given that mobile phones outnumber personal computers 10 to 1, and the ratio gets more skewed by the day, it is hardly surprising that the number of those accessing the internet on their phone instruments is much larger than those doing it on their PC at home or at a cybercafe. According to a report in this newspaper, the number of people accessing the internet on their phones rose from 16 million in 2006 to 38 million this year "" that is, not only is the number of mobile phones growing at a much faster pace than PCs, the proportion of those using mobile internet is also growing. By way of comparison, there are 11 million internet connections in the country and another 2.7 million broadband ones. So if the government is interested in increasing internet usage, mobile access is an important way forward.

The problem with mobile internet is that the speed of access is slow. At best, it is comparable with the inferior dial-up internet connections available and, at times, worse than that. For mobile internet to succeed, it needs to have a broadband path, a means to get faster. That, as everyone knows, is the potential that 3G mobile services offer "" broadband speed on mobile devices and all the applications that go with it, such as live streaming of video downloads and real time TV.

The problem with this is that while the way forward is well known, the policy on 3G has been pending for years and witnessed several proposals that have swung from one extreme to the other. Under the earlier telecom regulator, the recommendation was that only existing mobile phone operators should be allocated 3G spectrum, without any entry fee. The then minister for communications disagreed and so just sat on the recommendation; a new telecom regulator saw the policy being tweaked and an auction was recommended to determine the price for spectrum, but to keep the auction limited to the existing players. And now, when the current telecom minister held a press conference at the height of the controversy over his decision on crossover spectrum, he said that there would be an auction for 3G spectrum and even newcomers would be allowed to participate. Since a decision appears to have been taken, and is a sound one, it is time to move on it with speed.

To be sure, there are those who still argue that auctioning is a bad idea since it drives up costs, but there is enough evidence to suggest that this is not true "" after the fourth cellular licence was auctioned in 2001, competition has ensured that tariffs have come down, not gone up. In economists' jargon, auction fees are in the nature of 'sunk costs' and do not determine tariff levels. Given this, it is time to move quickly on auctioning the 3G spectrum. The other advantage of this, given that 3G spectrum is still largely used to offer 2G-type voice services (the number of large data users is still limited, even in more affluent markets), making this spectrum available will reduce some of the current tension over 2G spectrum as existing players who today feel they have no future (as they cannot get more spectrum) will see a way forward.

But having said all this, it bears stating also that the country should not ignore regular broadband. The backbone network for this has not been laid, and therefore the traditional form of internet connectivity through this best of all possible routes (for a host of institutional and even personal users) lags significantly behind China, though there is no particular reason why this should be the case. While pushing for 3G, the government should not forget that action is required on the broadband front.