“The country’s telecom revolution only took off after the government moved away from auctions and started assigning spectrum to licensees in return for a share of their revenue. The new system brought in twice as much in fees as the auction bids would have.” [shortened].
It seems such a slippery slope to tax infrastructure: although I guess it has the advantage that tax avoidance is difficult!
The companies still found ways to avoid taxes, but I guess that is a tautology ;) Say you are selling a wide menu of choices like an enterprise offering or better a restaurant. You can offer that appetizers are free as long as each individual orders at least two drinks. Make your appetizers salty and fried and it creates a (un)virtuous cycle of ordering more drinks.
Companies tried this exact strategy in India. They made the bandwidth cheap and moved revenue to ancillary services - ringtones, song libraries, ... Telecom authority ruled that all revenue falls under revenue sharing and the supreme court finally ruled against the telcos after a long drawn out battle.
The article claimed that the initial debt from the auction was more burdensome because telcos rely on a critical mass of infrastructure that they weren't able to create due to debt.
It seems such a slippery slope to tax infrastructure: although I guess it has the advantage that tax avoidance is difficult!