Policy booster likely for telecom companies

Operators to spend $20 billion for network upgrades: COAI

The government is working on a new policy to encourage capital spending and restore the financial health of mobile-phone operators battered by a bruising tariff war, Telecom Secretary Aruna Sundararajan said.

Public consultation will begin by year-end and Cabinet approval is expected by March, she said in an interview in New Delhi, declining to share details. Voicing a key industry demand, billionaire Sunil Mittal, who controls Bharti Airtel, said on Thursday that policymakers should reconsider norms, which effectively charge companies twice for spectrum. The price war may continue through the first half of 2018, he said.

“We are certainly looking at how we can have a healthy sector, how we can have ease of doing business, how operators can be incentivised to make necessary investments,” Sundararajan said. “The really long-term plan for the sector will emerge from the contours of the new policy.”

Any relief will be welcome in a sector grappling with the entry last year of Mukesh Ambani, whose Reliance Jio Infocomm offers free voice and cheap data services. Rivals have been forced to merge or exit, whittling down the number of operators in the world’s second-largest mobile market from a dozen early this year. As few as four may eventually remain, Sundararajan said.

The government should not charge twice for spectrum through revenue sharing and a ‘spectrum usage charge’ after operators have already paid at auctions, Bharti Airtel’s Mittal said at an event in New Delhi. “It’s like you sell something and then start collecting rent on it.”

Adjustments such as giving operators more time to make spectrum payments to the exchequer were recommended recently by a government panel.