The crux of the policy is to have broadband for all. As such, India has touched only 30 percent broadband penetration, and that too on mobile, 70 percent of the growth still remained to be tapped. This 70 percent growth ahead of us is what makes the government fairly confident that this is the strongest and most robust growth that the market has seen as far as the digital communication sector is concerned in the medium to long-term.
The government aims to attract USD 100 billion investment in the telecom sector in 5 years, a target questioned by many given the current financial stress in the sector. We did a comparative benchmarking with China, which has consistently spent USD 70 billion on telecom infrastructure per year for the past many years. We expect USD 100 billion in 5 years. In my view, USD 100 billion is actually a slight underestimation. If we really want to create next-generation infrastructure, India must create a framework where we can have significant investments coming into the sector. The investment in the sector will come once industry stabilizes. There are efforts to stabilize the industry soon.
Digitization has delivered immensely to the Indian economy in a very short period. It is estimated that in the last 2-3 years alone, the internet economy has contributed more than a USD 100 billion. Software has taken us almost 20 years to get to a turnover of USD 150 billion; the telecom sector, which is underlying the internet economy has delivered USD 100 billion in a much shorter timeframe.
DoT plans to focus on rationalizing license and spectrum usage charges and the Universal Services Obligation Fund. Fiber connectivity is critical to the sector’s growth.
We are a growth market. We have to ensure that the telecom story does not end here – rather it starts here. The current phase of consolidation has to be done by industry – they have to upgrade and invest in new technologies and each one has to figure out their business strategies. Our endeavor is to provide a level playing field and an enabling environment for growth – which is our duty – given that we are still at 30 percent broadband penetration. We have to go all the way to 100 percent.
Spectrum is a tool for socio-economic growth and therefore resources allocation policy, including spectrum, need to be viewed in that perspective. So, we need to optimize the outcomes spectrum can deliver… rather than looking at input prices of spectrum. The paramount need of the hour is to get investments in and get broadband to the people.
Questions asked are around the fact that there is a big wave of disruption in the entire telecom industry…there is bankruptcy, deep consolidation, unprecedented level of stress, and fall in revenue…It is true….but this policy seeks to address longer time horizon. It seeks to look at the fundamentals of the Indian telecom and digital communications ecosystem over a 5-year period. What the policy is focusing on is that the fundamentals of this economy and sectors are robust enough for us to aspire for these objectives.
The policy entails strategies to enable the sector to consolidate and stabilize in the short term and unleash fresh investments in the long run. The players in the sector need light-touch regulation, new institutional mechanisms, ease of doing business, stable and predictable regulatory environment – and the new policy recognizes those aspects. The policy specifically mentions that it will seek to address the current levels of stress.
While the necessity of having a strong digital communications infrastructure was verbally acknowledged by all, it has not been adequately mainstreamed into policies both at the center and states levels. Every state has been welcoming infrastructure and investment in roads and port, railways and housing, but adopted a revenue maximization policy for telecom infrastructure. We want to drive that change…going forward, every state must make an attempt to ensure that digital infrastructure gets built and is actively facilitated and accelerated. It is unacceptable to have a situation where states or local bodies extract exorbitant charges for Right of Way. I expect that within the first 2 months of the policy coming out, institutional mechanism will be in place to give shape to India’s growing digital aspirations.
We have to ensure the future of people at the lower level, especially those working in the retail outlets, is sustained. We are working toward stabilizing the sector in the new telecom policy, to ensure sustainable jobs for these people. The government is opening employment avenues through schemes such as BharatNet and public wi-fi. It is also working with the Telecom Sector Skill Council to find ways to retrain and redeploy people and also make them competent enough to work in the 5G network. Almost 200,000 people are employed in the industry, directly or indirectly.
On the 5G rollout, a government-appointed panel will submit a report next month which will lay out the exact roadmap for the rollout of the fifth-generation wireless telephony that promises to make the data speed even faster, leading to usage of the technology in many applications. We expect India to leapfrog in this technology and develop competencies of our own. We are not blindly following, but some techs are being developed here. We are looking at 5G as something that will transform.
We want to place the telecom policy before the cabinet in 4 weeks. It will be open for public comments for 2 weeks, and then we will finalize everything in a week and send to the cabinet after that.
Compiled from interviews published in the media.