Prime Minister Modi’s party BJP has returned to power for the second time. He shall lead India for another five years.
Spectrum Auction, 5G Trials Top Telecom Ministry Agenda For New Government
Preparing the Cabinet note for spectrum auction, rolling out of the new digital communications policy and establishing regulatory sandboxes, 5G technology trials, policy on experimentation and trial spectrum for technologies in June, will top the agenda of the Union Telecom Ministry over the next three months once the new government takes over.
With election results indicative of a return of the Modi government, the telecom ministry has started getting its act together by working on the pending schedule of the last government which was on halt for the polls while awaiting a new government.
Another area awaiting decisions are settling issues on merger and transfers of licenses of the mergers and acquisitions taken so far — such as Airtel-Telenor, Airtel-TTSL, Vodafone-Idea among others.
The Department of Telecom is also preparing a Cabinet note for spectrum auction for the new government. The much-awaited spectrum auction will finally happen in the second half of 2019 where a whopping 8,293.95 Mhz of telecom frequencies at an estimated total base price of Rs 5.77 lakh crore are expected to go under the hammer.
The new government will also face challenges since the telecom companies are still facing losses due to low tariffs on hyper-competition and huge spectrum dues though the market has improved.
Licence fee mop-up by the government in the December quarter rose 0.03 percent sequentially to Rs 2,890 crore, while spectrum usage charge (SUC) rose by 2 percent to Rs 1,064 crore, data from the Telecom Regulatory Authority of India (Trai) showed.
The industry’s blended monthly average revenue per user – a key performance metric – from wireless services increased over 4 percent sequentially to Rs 70.13 in the December quarter. The telecom sector’s Adjusted Gross Revenue shrank by a small 0.24 percent sequentially to Rs 36,054 crore in the December quarter, the Trai report said.
Still the tariffs are low and telcos have huge debts and that makes it difficult for the government to anticipate what kind of response the spectrum auction will generate as India gears up to meet the 5G rollout globally in 2020.
The pressure on the government for some financial relief would also be put by the industry as they might seek deferment of spectrum dues period or cutting down of licence fees.
The most prominent among the plans are the task of issuing 5G network trial licenses to the telcos along with the spectrum and also preparing the Cabinet note for spectrum auction in November, 2019.
The allocation will take place as soon as the new government takes charge, which could be in June, and depending on their readiness, the telcos could start the initial 5G run in the same month. The network trial licenses will be issued before that, said an official source. Business Standard
Narendra Modi Mandate: Definite Boost For Digital India
The clear mandate that the citizens of this country have given the Narendra Modi-led National Democratic Alliance (NDA), spells good news for the Digital India initiatives that the government initiatied and implemented over the last five years.
These initiatives include e-governance, Smart Cities programmed, the Government e Marketplace (GeM), e-Hospitals, e-Courts, Digi-Lockers, Common Service Centres, Make in India, Skills India, digital payments and the United Payment Interface (UPI) and the fillip to the home-grown electronic and startup ecosystem. Many of these programmes were ironically introduced by the former United Progressive Alliance (UPA) government but are now being taken to their logical conclusion by the current government.
Coupled with these is the NDA government’s recognition that India needs high-speed 5G networks as it enters the Internet of Things (IoT) era; that it needs advanced data analytics to harness the power of artificial intelligence (AI) tools; and that it needs to hone the use of other digital technologies like blockchain for smart contracts to usher in more transparency and speed up financial transactions.
Moreover, Narendra Modi himself is bullish on technology, is an ardent fan of social networking sites like Twitter and even experimented with a hologram in May 2014 in his bid to address multiple rallies simultaneously.
However, Digital India needs funds. It was only on 21 May that the Ministry of Electronics and Information Technology (MeitY) exhorted the Fifteenth Finance Commission, headed by Chairman N.K. Singh, to release funds for Digital India since the country was standing on the verge of a trillion dollar digital opportunity.
In its memorandum to the Commission, MeitY made some specific suggestions to ensure that the Digital India programme. Moreover, since the National e-Governance Plan (NeGP) is not a centrally-sponsored scheme any longer, MeitY asked for separate funds for the NeGP Scheme. It also proposed continuous Union support for funding under CSS the implementation of the core ICT infrastructure such as State Data Centres (SDC), State Wide Area Network (SWAN), State Service Delivery Gateway (SSDG), e-Districts etc.
The Commission assured MeitY that it would take into consideration all the issues raised by the Ministry in making its final recommendations. Now that the Modi government is sure to be back in power, the funds are likely to be disbursed in a timely manner.
On the positive side, India along with Singapore and Japan is among the top 20 countries in the Artificial Intelligence (AI) Readiness Index released by the International Development Research Centre (IDRC) and Oxford Insights on 21 May. India was ranked 19 in the AI readiness ranking, that examines 194 countries worldwide, assessing their governance, infrastructure and data, skills and education, and government and public services to measure how well these countries are prepared to manage the potentially transformative impacts of AI.
That said, implementing the Digital India vision is not without its share of challenges.
A case in point is Karnataka, a state that also houses India’s Silicon Valley—Bengaluru. The city can no longer be said to be the poster boy of technological progress given the state of its infrastructure and air pollution to name a few hurdles. Other metros like Delhi and Mumbai are in a similar dismal state.
In fact, according to a 22 May report by InterNations—the world’s largest expat community that identifies the best and worst countries to live a connected life–.
India is at the bottom of the pile when it comes to offering a digital environment to expatriates. In contrast, Estonia, Finland, Norway, Denmark, and New Zealand are among the countries that offer the best digital environment. Expats in these countries are very satisfied with their unrestricted access to online services and the possibility to pay without cash almost anywhere.
India, according to the report, was ranked 65 out of 68 countries. The reason, according to the report, is that India is the world’s most difficult country to live in when it comes to getting a local mobile phone number. Expats complain about administrative issues like filling up of forms. Administrative procedures do not get any easier with a lack of government services online.
Expats in India also struggle with a lack of high-speed internet at home: almost three in ten (28%) are unsatisfied with their internet speed, which is twelve percentage points above the worldwide average (16%). The perception is not off the mark. Even as India talks about 5G, mobile calls drop routinely in Digital India. Not to mention that many people in villages still do not have an Internet connection or enough local language content.
Moreover, not much progress has been made on the Smart Cities front. It typically takes 30-40 years to build a city. Programs like Smart Cities and Make in India will require considerable investments in terms of manpower, technological upgrades, skill development, digital literacy and, most importantly, a plethora of standards to be laid out and adhered to. Besides, sensors and other IoT devices need to be interoperable with each other and policies around security and data protection need to be clearly defined.
The Modi-led government surely has its digital work cut out for it. It should not allow the resounding mandate for another five-year term go in vain.―Livemint
BJP’s Victory To Improve Biz Sentiment, Boost Pvt Investment: Fitch
The BJP’s “apparent landslide victory” is likely to improve business sentiment and outlook for private investment, Fitch Ratings said Thursday.
It said that from a credit rating perspective, Fitch would focus on the extent of the next government’s efforts to improve India’s weak fiscal finances.
According to the trend, the BJP-led NDA will form the government at the Centre for the second successive term with absolute majority.
“The BJP’s apparent landslide victory marks an easing of political uncertainty and is likely to improve business sentiment and the outlook for private investment,” Fitch Ratings Director Asia-Pacific Thomas Rookmaaker said.
Fitch said although it expects the fiscal deficit to remain manageable in the next few years, but said it has seen “little indication” so far that the government will pursue significant deficit reduction of the order needed to meet the general government debt ceiling of 60 percent of GDP by March 2025 as mandated by the FRBM Act.
The global rating agency said it expect the government to remain reform-minded, as the BJP’s manifesto highlighted the aim to improve the business environment and governance standards, strengthen infrastructure, and stimulate the manufacturing sector through a new industrial policy.
“Of particular importance from a credit perspective will be the extent of the next government’s efforts to improve India’s weak fiscal finances. Fiscal consolidation stalled under the BJP in recent years, and its campaign promise to support farmers’ incomes has added to spending pressure,” Rookmaaker said.
Last month, Fitch retained India’s sovereign rating at ‘BBB-‘, the lowest investment grade, with stable outlook, saying a weak fiscal position continues to constrain its rating.
It was the 13th year in a row that global rating agency Fitch has rated India at ‘BBB’. It had last upgraded India’s sovereign rating from ‘BB+’ to ‘BBB-‘ with a stable outlook on August 1, 2006.
Rookmaaker said another area of potential reforms is to enhance the efficiency and effectiveness of government administration and the legal and judiciary system.
“This would allow the government to solidify reforms of its first term, for instance by further enlarging the tax base and improving the credit culture,” he said.
Earlier in the day, the US-based rating agency Moody’s said its credit view on India will depend on policies of the new government and expressed hope that the country would continue with its fiscal consolidation plan.
“Any credit implications of the outcome of India’s general election will be determined by the policies adopted by the government in the next few years. These policies are yet to be formulated,” Moody’s Investors Service Vice-President Sovereign Risk Group William Foster said.―Business Standard