Allocative efficiency of the mobile industry in India and its implications for spectrum policy

Abstract

This paper outlines the various stages of spectrum policy in India and highlights the underlying principle of maximal usage of spectrum advocated in the policy. It argues that allocative efficiency is a more appropriate policy measure and illustrates the absence of allocative efficiency in the Indian mobile industry. Possible causes of allocative inefficiency including insufficient spectrum allocation per operator, underpricing of spectrum, and inefficient use of the radio access network infrastructure are highlighted. Corresponding policy implications and prescriptions are discussed.