Govt will not let sector die: Minister assures telcos

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SME Times News Bureau | 28 Sep, 2017
Data, investments, interconnection usage charges, government policies and financial stress in the industry are the topics which topped the chart of the first day of India Mobile Congress 2017.

Industry stakeholders like Bharti Airtel and Idea Cellular voiced their concern about depleting industry revenue and assymetry in competition. Communications Minister Manoj Sinha took cognisance of the matter and said the government will again intervene if it is needed.

"There is nothing to worry. The sector has seen ups and downs. In 2000 also, there was a similar situation," Sinha told reporters in New Delhi on Wednesday.

"The government is aware of the stress in the sector, earlier also we have intervened, and if needed we will do so again," he added.

The minister said: "We will make sure that the sector does not die."

Earlier in the day, Idea Cellular CEO and MD Himanshu Kapania said the recently announced interconnection usage charges (IUC) by the Indian regulator will further deplete the industry of investable funds and there is an urgent need for the telecom ministry's intervention in the form of reasonable package to take the industry out of financial stress.

"The announced IUC will further deplete the industry of its investable funds beside creating inter-operator imbalances of high traffic assymmetries. The faultlines are already evident with the industry going through the stress," Kapania said while addressing the India Mobile Congress.

"This will also impact the long-term financial structure of the industry. The government's revenue collection will be hit adversely," he added.

The Telecom Regulatory Authority of India in its new regulation has more than halved IUC or mobile termination charges from 14 paise to 6 paise in a move that is perceived to adversely affect incumbent players. IUC is the charge that one telecom operator pays to another to terminate its call.

"The introduction and proliferation of bundled unlimited plans... lack of regulatory interventions has had deep impact on the industry. No industry can survive if tariffs have fallen by half in one year, but data tariff has fallen by one-tenth to one-fifteenth within a span of just one year," Kapania added.

Bharti Airtel Chairman Sunil Mittal said India has the potential to become the world's largest telecom market but the industry would require congenial government policies to do so.

"India has the potential to become world's largest telecom market. But none of us can do it alone. We have to collaborate among us. We have the eco-system... use common towers, fibres. The industry will not be able to do it alone. We need to combine with the government. Government policies will have to eventually decide how fast this digital wave in this country can propel," he added.

Talking about the industry's investments, Mittal said Airtel had invested over Rs 10,000 crore up till September in hard infrastructure.

Reliance Industries Ltd Chairman Mukesh Ambani said data is the new oil and India has abundance of it.

"Data is the new oil. India does not need to import it. We have it in super abundance. It will be a new source of value and will create opportunities and prosperity for India and millions of Indians," Ambani said while addressing the India Mobile Congress here.

"As a nation, we missed out on the first three global industrial revolutions -- namely mechanisation, mass production and automation. The Fourth Industrial Revolution, fuelled by connectivity, data and Artificial Intelligence, has now begun," he added.

Communications Minister said with exponential data consumption, the telecom industry is expected to generate revenue of $38.25 billion by 2017-end, registering a compounded annual growth rate of 5.2 percent between 2014 and 2017.

"Investment has increased by approximate 220 percent in the last four years. Operators have rolled out more than 0.2 million mobile tower sites in the last 15 months," Sinha said in his inaugural address at the India Mobile Congress 2017 in New Delhi.

India is the second largest telecom market in the world with 1.2 billion telecom users and 450 million internet users, he added.

The telecom industry generates 4 million direct and indirect employment.

IT and Electronics Minister Ravi Shankar Prasad stressed on mobile manufacturing in India.

Speaking about data security, he said: "We have to balance data availability, utility, anonymity and privacy."

The three-day event that started on Wednesday is first of its kind in India, following the footsteps of World Mobile Congress that takes place in Barcelona every year.

Led by the Department of Telecommunication as the nodal ministry, the India Mobile Congress is being organised by Cellular Operators Association of India (COAI)

It has housed 300 exhibitors along with 60 start-ups and eight embassies as participants.