Sunday, September 6, 2015

Indian mobile - call drops

Remember circuit switched networks versus packet switched networks? Telcom companies are supposed to be circuit switched. That means once your call has been established a dedicated circuit is created between you and the other party. However, if the telecom does not have enough resources to service all the concurrent clients, they occasionally break the circuit and move resources to newer calls. Now remember that mostly everyone is charged per minute and not per second. As a result, if a call is dropped by the telcom, and they charge for the whole minute to the user, it is cheating the customers. 

Here is an article about the same situation. 

If the telcom companies had to pay less money to acquire frequency spectrum, they could spend more money on the required hardware. Now with the spectrum becoming very very costly, either the customer pays a higher price, or the hardware suffers (or both). This is exactly what is happening right now. 

Then what is the solution to this problem? If the spectrum is cheap, even I will buy some and not use it (a big waste of national resource and air-space). If the spectrum is costly, then only big players will buy it but even they will not have enough money to spend on hardware. A much better way is to sell spectrum cheap attached to committed investment promissory notes. That way, a layman will not buy the spectrum because he does not have the money to show the hardware investment. Big companies, on the other hand, will only have to spend money in real hardware costs rather than having to buy thin air! Also, governments should get to regulate the spectrum market; but should they also get to sell it?

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