Over the past two years, India’s telecom sector has been struggling to stay afloat with intense pressure on profits due to declining tariffs and increasing costs. While this has led to a great deal for consumers, the industry is struggling under increasing debt, lower profits and declining cash flows.
In this context, the task is cut out for the new government in the Centre to carry out some of the promises made in the National Digital Communications Policy 2018 without further delay. On top priority should be the measures proposed to lower fees and levies on operators.
Mobile operators pay almost 30 percent of their revenues in the form of spectrum charges and other annual fees. These levies were introduced when spectrum was allocated on subscriber-based criteria. Since 2010, the Centre has shifted to auction of spectrum wherein winning operators pay an upfront fee to acquire the airwaves. Therefore, some of these levies can be easily waived off without any major revenue impact for the exchequer. The new government should also review the spectrum pricing formula to reduce the overall cost of offering services. Given that new mobile services will be supporting massive data applications, operators will need large amounts of spectrum.
There is a need to move away from the existing mechanism of pricing spectrum on a per MHz basis. New data services require at least 80-100 MHz of contiguous spectrum per operator. If the Centre were to fix the floor price based on the per MHz price realised in the last auction then no operator would be able to afford additional spectrum. Infrastructure creation, especially the much delayed optical fibre network, should be taken up on a mission mode so that it can complement the huge investments being made in rolling out the wireless networks.
The other area of focus should be on ensuring quality of services. Telecom consumers are no better today than they were two decades ago when it comes to getting access to uninterrupted voice calls and reliable Internet connectivity. Call drops, unwanted telemarketing calls, patchy data networks and unfair practices to get users to pay more are rampant. Consumers do not have access to a reliable and neutral complaint redress mechanism.
The new government should promptly notify the creation of an ombudsman to empower mobile consumers.
Telecom PSUs continue to languish under high manpower cost and bureaucratic decision making. The Centre must take immediate steps to revive Bharat Sanchar Nigam Ltd if it wants to achieve the objective of reaching 100 per cent tele-density in rural areas. Infrastructure creation, especially the much delayed optical fibre network, should be taken up on a mission mode.
Finally, there is also a big worry over the large quantity of telecom equipment and devices being imported. The Make in India plan needs to be tweaked to make local manufacturing a viable proposition.―The Hindu Business Line