Things will soon improve for telecom sector, says Manoj Sinha

At a time when the telecom sector is undergoing financial stress, Communications Minister Manoj Sinha believes the tough stage will be over soon and the sector will work as a facilitator for a growing economy, not only being a revenue generator for the government.

With intensified competition, the sector’s revenues have been hit. The Telecom Regulatory Authority of India (Trai) says gross revenue of service providers declined by 8.1 per cent to Rs 610 billion for the October-December quarter of 2017, compared to Rs 665 billion in the same period of 2016. 

Due to the decline in revenue, licence fee and spectrum charges paid to the government also fell in the quarter. The licence fee declined by 16 per cent to Rs 31 billion; spectrum charges were down 29 per cent to Rs 11.5 billion.

“It is true that there is stress in the telecom sector and like a responsible government, whenever the need arises, we have intervened. An inter-ministerial group was formed and the recommendations have been implemented,” Sinha said, while interacting with audiences at the ‘Off the Cuff’ show on television by senior journalist Shekhar Gupta.

He said relief measures had to also conform to legality. He added the market for telecom was a big one and when a similar situation had arisen in 2002, it had settled after a while. “With the speed at which data consumption is growing and number of consumers, I think in the coming months, things will be better,” the minister said.
 

“The sector should not only remain a source of revenue generation, but should work as a facilitator (for the economy’s growth),” he added.

Trai is likely to soon give its recommendations for the pricing of spectrum for the next round of auction. No auction was planned in the year ended March 31, as the operators did not show appetite for buying any airwaves. In the earlier auction, of 2016, the coveted 700 MHz spectrum band remained unsold due to a very high reserve price. The industry was watching for the announcement of reserve prices for various bands; it has long been asking that these be kept lower.

“Earlier, the demands were different and people were able to afford, but things have changed and the emerging technologies can contribute immensely to the country’s gross domestic product. The money, be it to the government or to the citizens, will benefit the country,” Sinha said, when asked about spectrum auctions and revenue to the government.

Regarding consolidation, the minister said it was a worldwide phenomenon. “Here also, there will be ultimately four-five players – Bharti Airtel, Reliance Jio, Idea-Vodafone combine, BSNL, and MTNL. So, there will be competition and the idea of consumer as king will also stay.”

On a new telecom policy, he said it would be forward-looking, work to stimulate sustainable growth for adoption of emerging technologies, and ease of doing business. 

Telecom has been a success story and it should stay that way, the minister stressed.