ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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3G Spectrum Auctions in India: A Critical Appraisal

That auction should be a preferred route to allocate scarce resources such as spectrum is conditional upon getting the auction design right. We analyse the auction design employed in the spectrum allocation for third generation and broadband wireless access services, assessing its success on the parameters of revenue realisation, efficiency, post-auction market structure, and impact on consumers. While the auction has been successful in mobilising revenue for the government, and has created little adverse impact for the consumers by maintaining the level of competitiveness in the mobile services market, these gains seem to have been offset by the loss in efficiency as well as a higher complexity of bidding strategies. In making the Lowest Accepted Bid a preferred pricing rule, the government accorded primacy to revenue realisation over maximising allocational efficiencies. Thus we propose alternative design elements which would have served the stated objective of enhancing allocational efficiencies better.

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