Pricing Telecom Licences in India
(12 pages of text)
On February 2, 2012, the Supreme Court of India cancelled all 122 second-generation (2G) telecom licences issued on or after January 10, 2008 by the Department of Telecommunication (DoT). This judgment, along with the announcement of the National Telecom Policy-2012, forced the DoT to rethink the issue of pricing spectrum, which was earlier bundled with 2G licences. First, was re-auctioning required? If so, what should be the minimum reserve price? Should DoT follow a uniform pricing strategy for all the incumbents, including those whose licences were cancelled? How could it strike a balance between investor apathy and the government’s objective of increasing rural tele-density, given the possibility of a tariff hike after the refarming of spectrum?
- To understand oligopoly market structure and price stickiness.
- To examine the public policy framework and the regulatory framework for pricing natural resources.
- To consider the ethical implications of natural resources allocation.
- To analyze the concept of auction pricing and its pros and cons.
This case can be used in introductory courses in marketing management, public policy and micro economics at the postgraduate level - MBA (marketing) or M.Com/MA (economics) or equivalent.
Information, Media & Telecommunications
India, Large, 2012
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