Jul 7, 2009

Wireless Economics Primer

Business Standard ran a very interesting article on "Spectral allocation policy". The author has given findings from a report which concludes that a great density of operators actually brings down welfare in terms of consumer surplus.

As technologists (my previous avatar in industry), we tend to forget this aspect of technology. Some questions that we need to pose to ourselves when we run behind the best, most-efficient and finest gadget should be,
(1) What is the objective of technology?
(2) Do we really need the best of the best technology? Or can we manage well with mature technology?
(3) Remember our context of a developing nation which still does not have additional money for such spending.

The point is that technology will change by Moore's law, but do we really need to pursue the best? With the large market size, we can force suppliers to continue supporting somewhat mature technology.

While mature technology may not be the most efficient, don't forget it is the cheapest and most cost effective. This is interesting. For me, this is economics refresher. Time to hit back to Microeconomics by Michael Baye and to get to the report that Shyam Ponappa refers to.

- Siddharth

Link to Business Standard article (will become subscriber only soon):
http://www.business-standard.com/india/storypage.php?autono=362655

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