Telecom Minister Manoj Sinha Tuesday said proactive policies of the government over the last four years have led to a sharp fall in mobile tariffs and a “marked improvement” in the call drop situation, while stressing that the Centre will not hesitate from taking tough decisions to maintain the “success story” of the telecom sector.
Sinha also sought to allay apprehensions around job losses in the sector, saying that new opportunities in telecom have spawned new jobs, and termed consolidation in the sector as a global phenomenon.
The minister was also quick to rise to the defence of telecom PSUs Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) saying that the two companies are making all-out efforts to improve service quality, despite the “handicap” of not having 4G spectrum in an intensely competitive market.
“Telecom sector has been a success story, and we will ensure that this story remains intact. We have taken steps… be it on interest rates or deferred spectrum payment. In future also, if required we will take such decisions,” the minister said when asked about the financial stress being faced by telecom operators.
The minister, speaking at a conference to highlight the achievements of the government, said even the most developed telecom markets worldwide had only 3-5 players, and India too was no different.
“Consolidation is a global phenomenon and India too is part of this phenomenon,” he said.
The comments come at a time when the sector is battling financial difficulty, and the industry’s debt burden is estimated to be almost Rs 7.6 lakh crore.
The revenue, profitability and key operational metrics of all established operators have come under severe strain after newcomer Reliance Jio unleashed aggressive and disruptive tariffs in the market to win customers.
The intense competition – that shows no signs of let off – has resulted in massive consolidation by way of mergers and acquisitions and exit of some players. Earlier this year, the government decided to increase the number of installments for spectrum payments, and radiowaves frequency holding limits, in order to provide relief to operators.
The Telecom Department has also issued the draft of a new telecom policy – National Digital Communications Policy – last month with the aim to attract USD 100 billion (about Rs 6.5 lakh crore) investments in the sector.
The upcoming policy proposes to address the woes of debt-ridden telecom industry by reviewing licence fees, spectrum usage charges, universal service obligation fund levy — all of which add to the cost of telecom services.
On call drops, the minister said that the two prime benchmarks for call drop measurement have indicated a sharp improvement in service quality.
“The TRAI (Telecom Regulatory Authority of India) report which monitors the call drop situation has shown an improvement in last 15 months. The Communications Ministry also has IVRS (Interactive Voice Response System) and reports indicate a marked improvement. The telecom footprint has doubled in the last four years, so may towers have come up, despite the difficulties,” the minister said.
Sinha conceded that while there may have been some job losses, those numbers were far lower than new jobs created in the sector.
Replying to a query on consolidation leading to job losses in the sector, which some estimate could be as high as one lakh, Sinha said: “I agree that some job losses may have taken place but new opportunities have come up too. Based on figures available, I can say that with full confidence that new jobs have come up. In the last four years, new jobs opportunities have been more than jobs lost”.
He attributed the sharp fall in call and data prices to the policies of the Modi government and pointed out that data rates have crashed to a fraction of previous levels.
The minister said the government is seriously examining the request of two telecom PSUs — BSNL and MTNL — for equity infusion. The two companies have separately approached the Telecom Department for 4G spectrum, which they want to partly fund by offering additional equity to the government.
“After a long time, MTNL has decided to invest in technology and network, which will enable them to provide better services. They face a handicap that they do not have 4G spectrum, and Ministry and Government are seriously considering the issue,” Sinha said while lauding the two PSUs for managing to hold onto the market despite not having full-fledged 4G services.
While MTNL has written to the Telecom Department seeking spectrum in the 1800 and 2100 MHz bands to launch 4G services to strengthen its service portfolio, BSNL’s proposal pertains to allotment of spectrum in the 700 MHz band or 2100 MHz band for 4G services.