Challenges in adopting market mechanisms for spectrum: lessons from India and the Philippines

Abstract

Technological developments in wireless and the decreasing costs have created opportunities for faster deployment of telecommunications services. This speed is critical for developing countries, especially in rural areas, as the role of telecommunications in development is more significant for them. The uptake of wireless technologies has been rapid in most developing countries. For the most part, these have been cellular networks that operate in the licensed bands. The Asian region has been one of the fastest growing segments of the wireless market. Yet, a closer look at the policy and regulatory regime points to a need for a review of existing processes, institutions and instruments for more market-oriented outcomes. This paper examines the process of allocation and pricing of spectrum especially in the context of new service introduction in India and the Philippines. The paper is based on case studies of first-hand data collected from the regulatory agencies. It highlights the perspective that each regulatory agency adopted to manage this scarce natural resource and examines the role of other institutions and their interactions with the regulatory agencies in influencing outcomes. It brings forth the need for a well-organised process and a forward-looking flexible regime in tune with the rapid technological changes.