Having grown exponentially between 2002 and 2009, Indian telecom industry has since not only witnessed a dip in growth but has also been affected by policy uncertainty and alleged corrupt practices.
According to experts, while the sector faces a lot of regulatory uncertainty, the new government has the opportunity to lay the road ahead for an industry, once considered a ‘sunrise sector’, especially in terms of spectrum allocations and mergers and acquisitions and thereby provide a stable policy for the next 5 years, at least. As of now there is no clarity on how much spectrum will be auctioned and when.
“There are several licences ending in FY16. There must be a roadmap for that and a one-year advance notice should be given to the industry on how much spectrum will be available and when,” said a source familiar with regulatory developments. While the telecom is a sector is witnessing a change in market dynamics, experts feel that M&A policy for the sector must be worked upon.
“While the policy is out, mergers are not happening. The policy must facilitate mergers,” said Romal Shetty, head of telecom practice at KPMG. Manufacturing is another issue for the telecom sector where experts feel the new government needs to divert some attention.
“We do not really look at indigenous manufacturing and the government will have to focus on that,” said Shetty.