TRAI has pushed us to a level where only one technology survives: Idea official

Recent market development has drastically altered the dynamics of the industry, said Himanshu Kapania, managing director, Idea Cellular Limited

GN Bureau | September 27, 2017


#Idea   #technology   #India Mobile Congress   #TRAI  

 TRAI has pushed us to a level where only one technology survives and all older technologies close down, said Himanshu Kapania, managing director, Idea Cellular Limited.

Excerpts from Kapania’s address at India Mobile Congress: 
 
While we are talking about the 2020 vision, lets also talk about the elephant in the room. 
 
There is no doubt that India's role in economy can be emphasised enough. The tremendous economic energy unleashed in India over last few years has placed us among the fastest growing economies. 
 
Over last two decades wireless industry especially the private sector have built the finest and widest service infra for mobile voice high way and today it connects 5 lakh towns and villages in India. Indian telecom industry has emerged as a force multiplier by connecting the unconnected. 
 
It was 7 years back that India had only 200 million users and we have added a billion people in such a short span of time. 
 
Three percent of economy is directly related to telecom.  
 
Recent market development has drastically altered the dynamics of the industry, resulting in the sector passing through severe financial and mental stress. The introduction of and subsequent proliferation of bundled voice and data usage plans, outcome of lack of effective regulatory intervention had a deep impact on realisation rates on the industry. 
 
The voice tariffs have fallen to half in one year. But the data tariff have fallen by one tenth and one fifteenth. Voice and data tariffs were already acknowledged lowest in the world and have now plummeted below cost. 
 
Now the interconnect charges further depletes the industry of funds, besides creating inter-operator imbalances on account of high traffic traffic asymmetry. 
 
The fault lines are already evident.  For the first time in history, the industry is seeing de-growth of 2 percent in FY 2016-17. Industry forecast has declined from 10 - 12 pc including the impact of 58 pc reduction in IUC. 
 
Undoubtedly, it will also impact in the long term competition structure of the industry, as mentioned by (Airtel CEO) Gopal. 
But it is very evident that government's revenue collection will be hit adversely. 
While this is happening on financial side, the infrastructure building is continuing undisturbed. 
 
The Indian mobile telecom is gearing for big transition in services. 
By 2021, 500 mn - 600 mn Indians will be using internet, mostly all of them on 4G. And hopefully 4G will yield revenue per customer at somewhere between Rs 175 Rs to Rs 200 from the current level of below Rs 100. 
 
However, there is going to be 900 million Indians who use 2G network for their connectivity. 
 
These 2G and 3G networks are lifelines and mass market for rural India by enabling connectivity as low as Rs 10 per month. The rapid revenue growth of the industry coupled with alarming threat of higher NPAs will curtail industry's ability to invest. 
 
So the challenge for vision 2020 today is that the government of India has to decide if it wants only to have 4G or it will allow co0existence of 4G with 2G. And this is an important element because the TRAI has pushed us to a level that only one technology survives and all older technologies close down. 
 
In such a challenging scenario, there is an urgent intervention / support required form the telecom ministry in form of reasonable package that can help in alleviating current financial stress in the sector. Mobility industry remains one of the most taxed sector.
Spectrum, the key raw material, remains the most costly element for the industry. 
 
The deferment of spectrum pay out and reduction of applicable interest rates are immediate steps that need to be taken. 
The industry also looks forward to the new telecom policy 2018 which will propel India to digitally connected 2020. 
 
But unless you resolve the legacy of high cost spectrum …we will always be hostage to the past.

Comments

 

Other News

‘World’s biggest festival of democracy’ begins

The much-awaited General Elections of 2024, billed as the world’s biggest festival of democracy, began on Friday with Phase 1 of polling in 102 Parliamentary Constituencies (the highest among all seven phases) in 21 States/ UTs and 92 Assembly Constituencies in the State Assembly Elections in Arunach

A sustainability warrior’s heartfelt stories of life’s fleeting moments

Fit In, Stand Out, Walk: Stories from a Pushed Away Hill By Shailini Sheth Amin Notion Press, Rs 399

What EU’s AI Act means for the world

The recent European Union (EU) policy on artificial intelligence (AI) will be a game-changer and likely to become the de-facto standard not only for the conduct of businesses but also for the way consumers think about AI tools. Governments across the globe have been grappling with the rapid rise of AI tool

Indian Railways celebrates 171 years of its pioneering journey

The Indian Railways is celebrating 171 glorious years of its existence. Going back in time, the first train in India (and Asia) ran between Mumbai and Thane on April 16, 1853. It was flagged off from Boribunder (where CSMT stands today). As the years passed, the Great Indian Peninsula Railway which ran the

Vasudhaiva Kutumbakam: How to connect businesses with people

7 Chakras of Management: Wisdom from Indic Scriptures By Ashutosh Garg Rupa Publications, 282 pages, Rs 595

ECI walks extra mile to reach out to elderly, PwD voters

In a path-breaking initiative, the Election Commission of India (ECI), for the first time in a Lok Sabha Election, has provided the facility of home voting for the elderly and Persons with Disabilities in the 2024 Lok Sabha elections. Voters above 85 years of age and Persons with Disabilities (PwDs) with 4

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter