BJP, INC not pledging any significant policy reforms for telecom: Fitch

Leading political parties Bharatiya Janata Party and Indian National Congress have not pledged any significant policy reform for debt-ridden telecom sector, Fitch Solutions Macro Research said Tuesday.

However, their popular poll promises may help the sector by pushing up consumer spending on communications services, it said.

"Neither the Bharatiya Janata Party (BJP) nor Indian National Congress (INC) are pledging significant policy reform in the telecom sector, which will continue to suffer from depressed earnings and elevated debt levels in the near term.

"Populist measures could lend tailwinds to increased short-term spending on communications services," Fitch Solutions said in its industry trend analysis.

The firm said that mobile subscription growth in India is likely to outperform with its compound annual growth rate (CAGR) of 1.7 per cent over the 2019-28 compared to the Asia average of 1 per cent due to support that is expected to come from the populist measures proposed by both the leading political parties and continued price-led competition, which will attract first-time subscribers.

Both BJP and INC have committed to provide national broadband connectivity to every village in India.

The nationwide BharatNet broadband project was officially launched in 2011 under the Congress-led United Progressive Alliance (UPA) government to connect all 2.5 lakh village panchayats in the country.

"That administration itself made little progress towards rollout, with most of the infrastructure deployed by the successor BJP-led National Democratic Alliance (NDA) government instead. The initiative itself, however, has missed several deadlines, and as of December 2018 the government announced that about half of the village blocks were connected to the ?bre network," Fitch Solutions said.

The firm said that both parties are keen to deliver on their pledges in order to shore up electoral support.

The BJP has promised to double farmer incomes by 2022 from 2014 levels, while the Congress has proposed steps to raise expenditures and slash taxes, it added.