Will India Be Able to Get Past This Hump?

The telecom sector is at a crossroads once again! Many critical issues, which will determine the very survival of the sector, are looking to the decision makers in the government for answers.

Will 5G spectrum auctions take place before we bid adieu to 2019? Are we in the running in the 5G services race, read, will the government exhibit maturity with spectrum auctions, work out what is possible for all three operators to be able to acquire spectrum, and take the industry to the next logical step? Will India accept Huawei’s extended arm of opening up its technology for development, and go ahead with a technology-savvy, cost-competitive vendor – an imperative if 5G has to see the light of day in the country? Will the government bail out BSNL and revive it at a cost of Rs 74,000 crore or decide to end this story at Rs 95,000 crore? The estimated value of real assets of BSNL is Rs 2.05 lakh crore – the real estate assets, fiber-optic network, and mobile towers of BSNL and MTNL combined are pegged at Rs 1.10 lakh crore, Rs 60,000 crore, and Rs 35,000 crore respectively.

In the meantime, the tussle over market shares is escalating. After the well-documented tariff war, the issue of zero versus 14 paise IUC sprung up, followed by a reduction in ringer time from 30 to finally 25 seconds. And now, in an attempt to hit the 500-million subscriber mark, a festive season offer of Rs 699 for a JioPhone, accompanied by a total of Rs 700 worth of data on the next seven recharges has been launched by Jio. This seems a direct hit at the 2G and 3G, VIL and Airtel customers. The pessimists are anticipating a duopoly, a totally undesirable outcome for a free economy.

In the biggest reduction in 28 years, the government has recently announced a cut in corporate tax rate by almost 10 percentage points. For companies looking to shift from China or considering a China Plus One policy, with base tax rate coming down to 22 percent (15 percent in case of new investments in manufacturing), India now has one of the lowest corporate tax rates in the region. India is looking to galvanize smartphone and component manufacturing, and position itself as a global hub. Having recently secured the fifth-highest destination position in FDI globally, to come out of the woods, it is imperative that the state, as an enabler, and the industry, as an executor, be totally aligned!