Monday, 11 April 2011

Indian corruption scandal

More in the press today about the alleged $39B the Indian government "lost" due to corruption in the country's 2G auctions 3 years ago. Although the machinations of the notoriously Byzantine India legal and governmental system are frankly beyond me (it strikes me that such anti-capitalist rumblings by Indian politicians attempt to distract from their long-term failure to set India up for growth), an important question that should be considered is the trade-off for consumers and for overall growth of cheap spectrum licenses. Communications are a proven multiplier for economic growth and on my last visit to India practically everyone was glued to their handset. If the same can happen with data phones in the future then the net effect on an economy the size of India's will far exceed the $39B they "lost" due to corruption. In any case, the supposed loss seems rather arbitrary, since no one in a developed economy would have paid that much for the spectrum on offer, let alone in one where ARPU is under $5. 1.2B people or not... Anyway, just my 2p...

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