India moves on to 3G

It was in 2007 that I first read that 3G spectrum would be auctioned and defence would vacate spectrum which is required for 3G services. It was at that time itself that I read BSNL was setting up an alternative optic fiber network for the defence department. Since then the auctions have been postponed so many times that people have lost count. The alternative network is not yet ready but is expected to be ready as work has commenced. The auction finally commenced when somebody suggested that India could directly move on to 4G as it was too late for 3G to start.
Unfortunately the auctions didn't go as people had expected it to. The bidding was fierce and prices went through the roof. What happens next?
with low call rates and a huge number of people who never have more than Rs. 2 in their prepaid account, telecom companies (telcos from now on) are already looking forward to reduced profitability. no company currently has enough cash to pay the spectrum auction charges. as a result they'll have to raise debt which might further reduce profitability.
More than the reduced profitability, it is the future services that I'm thinking of. With the prices that they are paying, it is unlikely that 3G services will be affordable. As a tech magazine editor had written, "if 3G data charges are at par with 2G data charges, the whole purpose of 3G is defeated."
I am thinking of those things. If tomorrow the telcos decide to charge Rs. 3-5 per MB for data transfer, it is unlikely that even the biggest enthusiast will use it for anything more than facebook & Twitter. This is already possible and we can do it very well on EDGE enabled handsets. so basically we are looking forward to a 3G service which won't be anything more than a showpiece technology which people will drool about. Unfortunately, some analysts say that if things go this way, we could be looking towards a situation where telcos would soon be seeking government help & bailout packages.
The telecom revolution that India has seen in the first decade, is likely to backfire in the second decade. we could see increasing tariffs, bankrupt companies and unusable technology. cheap broadband still remains a dream in India, it is unlikely to change with 3G. High data charges coupled with clogging bandwidth could see another unfulfilled dream for the country, broadband penetration in rural areas remains unlikely in the near future even after 3G service are launched.