The Telecom Crisis Deepens

Do PM Narendra Modi, FM Nirmala Sitharaman, and their team want to go down in history as having been responsible for turning the tide of the Indian economy? The telecom industry, having made huge contributions to the exchequer over the last 27 years, when can bleed no more, continues to be perceived as a cash cow. Initiatives as Digital India, Smart Cities, and the like, will be in jeopardy if the government does not act sensibly and nurse the industry, which is not only the backbone of next-gen tech but has also honestly contributed to its coffers, back to good health. I invite the readers to turn to page 7 of this edition for Rahul Khullar’s guest column A wake-up call for DoT, published in a recent edition of the daily Business Standard. That says it all.

As the industry is struggling for funds, it is of great concern that as on June 2019, Rs 50,554 crore of the Universal Service Obligation Fund remains unutilized, and is being diverted to the Consolidated Fund of India. In any case, this amount is more than the requirement to connect 43,000 remaining unconnected villages, according to COAI. Until this amount is fully disbursed, the government would be well advised to do away with the 5 percent of revenue contribution made by the CSPs toward the fund. TRAI, CAG, and the telecom ministry have also voiced their concerns over this.

As India moves to being a digital economy, in the last one month, three conglomerates, Reliance Jio, Adani Group, and Hiranandani Group have announced plans to set up data centers in India. While Jio, over the next 10 years, plans to build data centers across India that run Microsoft’s Azure cloud, Adani expects to invest Rs 70,000 crore to build data parks in a southern state over the next two decades. And the Hiranandani Group is looking to invest about Rs 15,000 crore over the next 5–7 years in setting up data centers in Mumbai, Panvel, and Chennai.

Telecom remains a lucrative industry, where continuous investment and a steady stream of revenues shall always be forthcoming. Yes, a little wisdom and maturity from the government is imperative.