Telcos should focus more on ICT: Experts

As the government mopped up over Rs.61,000 crore from the just concluded 2G spectrum auction, Communications Minister Kapil Sibal said this would bring a smile to the face of the Finance Minister P. Chidambaram.

But industry experts say it is not the way to improve the fiscal situation and economic growth by bringing in quick money through auctions and licence fees.

"The primary role of the telecom industry is not to meet the current account deficit (CAD) of the country. Its role is to enhance the Information and Communication Technology (ICT) industry, which in turn will boost the economy of the country," Jaideep Ghosh, partner, KPMG in India told IANS.

The government raised Rs.61,162.22 crore in the auction that ended Thursday. It will get minimum of Rs.18,296.36 crore from this auction this fiscal (2013-14) against a set target of Rs.11,343 crore from the auction. The additional collections will help the government to keep its fiscal deficit under control.

Rishi Tejpal, principal research analyst with Gartner echoed similar thoughts like Ghosh.

"The priority of the telecom industry should be to enhance ICT. That will bing in more growth opportunities. If the service providers grow properly and they have more money naturally they will invest more and that will help the economy of the countr"," Tejpal told IANS.

Eight mobile phone service providers - Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone, Telewings, Aircel, Tata Teleservices and Idea Cellular - took part in the auction that began Feb 3 for 46 MHz in 900 MHz band and 385 MHz in 1,800 MHz band. Eighty percent of the airwaves that was on auction in 1800 MHz was sold out and in 900 MHz entire airwaves that was offered got sold out.

The telecom players who participated and won airwaves have the option to pay 33 percent upfront for 1800 Mhz band, and 25 percent in case of 900 Mhz band.

Reliance Jio Infocomm, which is a new entrant has successfully acquired the right to use spectrum in 14 key circles across India in the 1800 MHz band. The cost to the company for the right to use this for

a period of 20 years is Rs.11,054 crore, the company said in a statement.