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Telecom Firms Relieved; Customers’ Turn Now

Not long ago, India had 12 telecom players, which has reduced to three private firms, a PSU that hardly counts and a duopoly in every circle

Telecom Relieved; Customers' Turn Now

As the greatest Indian economic success story of the 1990s and 2000s was about to nosedive, what with both rules and the Supreme Court breathing down the neck of the industry, the union government has come up with a big relief package for the struggling telecommunication businesses. This comes more than six years after the Digital India programme that aimed at transforming the country into a “digitally empowered society and knowledge economy”. Long overdue, the bailout must help Vodafone Idea, was on the verge of bankruptcy, the most. As the telecom companies owed about Rs 92,000 crore to the union government as licence fee and Rs 41,000 crore as spectrum usage fees, the government offered the companies a four-year moratorium in paying the statutory AGR dues (greater than Rs 1.68 lakh crore as of 30 June), scrapped the spectrum usage charge for airwaves acquired in future spectrum auctions and 100% FDI in the sector under the automatic route. The reform measure is deeper, as the definition of AGR has been revised, excluding non-telecom revenue on which the dues were accruing. It would reduce litigation as well. If the industry is rejuvenated, about 27 crore wireless subscribers will be relieved too. While the prohibitive floor price is another issue the state must address, the heads of telecom giants and their lawyers will hopefully stop occupying news headlines with negativity like Kumar Mangalam Birla giving up, Vodafone Group CEO Nick Read telling analysts that the company would not invest any additional equity in India or Mukul Rohatgi making a clarion call from the Supreme Court.

The government is but a bit out of place to claim the reforms package would help the companies survive while ensuring healthy competition, as new players can enter the fray with ease too. Not long ago, India had 12 major telecom players, a number that has reduced to three private and one PSU that hardly counts. Once again like the second half of the 1990s, every circle is seeing a duopoly, suspected to have formed cartels to the disadvantage of consumers as their deals on offer are so similar that a choice is difficult to make. What the Narendra Modi regime has done better than the Atal Bihari Vajpayee administration is giving no assurance to the industry that a fair contest in the market would be kept at bay so that two players in every circle could take customers for a ride. The players can now share spectrum without incurring extra costs and hold the airwaves acquired at an auction for 30 years instead of 20.

With ample scope for employment in this sector, the second-largest telecommunication market after China can once again lead an economic turnaround of the country, emerging post-Chinese virus pandemic, riding on a subscriber base of over 115 crore. It may well expect to add 50 crore new internet users, thanks to deeper mobile telephony penetration and bridging of the digital divide. It is time to stop whining, come up with better marketing strategies and ending problems users face, which portability of one’s number from one service provider to another does not sort out.


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