Evidence Based Policy Influence: Estimating the Economic Value of Unlicensed Spectrum in India
Posted: 16 Mar 2018
Date Written: March 16, 2018
Abstract
Use of unlicensed spectrum for services (Wi-Fi, RFID, IoT) adds significant economic value to the economy due to its lower costs and higher levels of innovation. Besides these specific services, use of unlicensed spectrum also enhances the value of the licensed spectrum. Additional devices, higher speeds and increased bandwidths contribute to higher economic value to producers and consumers and increased benefits through taxes to the government.
Unlicensed Spectrum in India
In the context of inadequate spectrum per operator, high cost of mobile network investments and existing debts of operators, augmenting services using unlicensed spectrum is an attractive option. This is more relevant as nearly 95% of the Internet access is through wireless.
Unlicensed Spectrum for Enhanced Communication
Protocols such as Wi-Fi, WiGig in the access network ameliorate the problem of inadequate spectrum and in-building coverage in urban areas. In rural areas, such technologies help to provide last mile connectivity to end users. For example, these could be used to augment BharatNet, a national project for fibre connectivity to village administrative units.
Commensurate with increasing demand on access spectrum, there is a tremendous pressure on backhaul capacity as fibre connectivity is estimated to cover only 15-20% of existing towers. The use of unlicensed bands (e.g. V and E bands) for backhaul could be cost-effective.
Unlicensed Spectrum in Other Areas
Potential economic value from IoT, RFID, smart city infrastructure deployments is also expected to be significant.
Current Scenario
In comparison to global availability, India has very little unlicensed spectrum available for use. Government has adopted a narrow interpretation of a Supreme Court judgment that canceled 122 2G licenses on grounds of unfairness and depriving the government of higher amounts that could have been realized through auctions and mandated auctions for such allocation. Government is reluctant to release spectrum which will not be paid for.
Releasing more spectrum for unlicensed use needs several policy changes and will require spectrum currently being held by various sectors. In order to provide support for policy review, an assessment of the economic value of unlicensed spectrum would be very relevant. Although such studies have been done in USA, to our knowledge such a study has not been carried out so far for India.
Objective: The objective of our research is to assess the economic value of unlicensed spectrum in India covering Wi-Fi, V and E band, RFID, IoT and other applications.
As an input to the policy process, the study would facilitate:
a) Assessment of the economic value that could be unlocked. b) Comparison of various drivers of value vis-à-vis past studies in other countries.
Methods
We intend to use both the producer/consumer surplus method and also estimate the value generated by direct sales of technology, services and applications in the unlicensed bands. For the producer/consumer surplus, real-life cost data of operations and primary consumer surveys capturing actual economic benefit will be used. For the second part, secondary sources of data will be used.
Keywords: Unlicensed Spectrum, WiFi, Economic Value
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