Economics Times, June 29, 2019
Telecom minister Ravi Shankar Prasad said the department has set up a panel to rationalise levies such as spectrum usage charges (SUC) as well as the universal service obligation fee (USOF) and other issues plaguing the sector in order to alleviate the financial distress facing companies.
“The whole idea is to give some output which can destress the sector and is also forwardlooking,” he said. The process will be fast-tracked and the committee is expected to submit a report in two weeks.
Easing the stress of private as well as public sector companies was his immediate concern, Prasad told reporters on Friday. He will soon be meeting phone companies to discuss the issues and the way forward for the telecom sector. “I have noted that the telecom sector has been going under stress for some time,” the minister said. “I will be holding meetings with all the telcos soon and I have constituted a committee under telecom secretary’s leadership to look into the entire issue of rationalisation, of removing ambiguities in ease of doing business and revisit the whole issues of spectrum usage charges.”
The telecom industry has repeatedly sought a reduction in levies, including licence fees, USOF and SUC, which account for over a third of annual revenue, besides lower spectrum prices. In a relief to telcos, the government last year increased the tenure of annual spectrum payments.
India’s older telcos such as Bharti AirtelNSE 0.38 %, Vodafone Idea and the state-run Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telecom Nigam Ltd (MTNL) have been gripped by financial stress.
They are saddled with a cumulated debt of nearly Rs 8 lakh crore, weak revenues and losses, largely owing to high spectrum charges and the entry of Reliance Jio Infocomm.
The Mukesh Ambani-owned carrier’s aggressive foray added to the pressures that led to the merger that resulted in Vodafone Idea as well as companies such as Aircel and Reliance CommunicationsNSE 2.94 % going out of business or getting taken over by other carriers.
“I have also noticed consolidation in the sector, but competition needs to be fair,” he said further. Bharti Airtel, for instance, absorbed Telenor India, the mobile business of Tata TeleservicesNSE 4.94 % and Tikona.
The minister, who also holds the portfolio of law and justice, added that the solicitor general could provide legal clarity as needed. A proposed revival plan for the ailing BSNL and MTNL will be sent to the cabinet for approval, he said. This will be aimed at making them more competitive and professional through rehabilitation.
“They’re a national asset,” Prasad said. “They operate in strategic regions such as defence and, in case of need, like in natural disasters, they’re in the forefront of giving free services.” The minister has told Parliament that the inability to provide 4G services and high employee costs were dragging down the state-run carriers. Requests for additional spectrum with government support for providing 4G services are to be included in the revival plan, which is being prepared by the Indian Institute of Management (IIM), Ahmedabad, and consultancy firm Deloitte.
The government wants the 5G rollout to be accompanied by the creation of intellectual property through innovation. Besides the Indian Institutes of Technology (IITs), which are creating test beds and trials, the minister has mandated the Department of Telecommunications (DoT) to involve startups and the big software companies in the development of new technology.
“Some of the initial responses have been good,” Prasad said. The DoT will follow up with the tech companies. Tata Sons chairman N Chandrasekaran has assured his support, he said.
On the local manufacturing front, the government wants India to become an export hub for electronics. The electronics and information technology ministry will prepare a presentation and follow it up with meetings with industry.
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