The Department of Telecommunications (DoT) will hold discussions with the industry to sort out various issues surrounding ease of doing business, a top official said adding that the fundamentals of the telecom industry are strong enough to attract $100 billion investment in the sector.
“There is a need for reforms in ease of doing business in this sector… if there had been legacy issues, which have been a challenge for the ease of doing business, we are saying prospectively we will sit together with the industry to see how this can be sorted out,” said Aruna Sundararajan, Telecom Secretary, on Friday.
“It is true that right now the industry is undergoing stress – there is high debt, technology disruption happening, shake out of players…,” she added.
“The fundamentals of the sector are very robust,” Ms. Sundararjan said adding that the Centre would do everything it can to bring in investments.
She added that the three to four players that are left in the sector are all big players who are capable of pumping in capital. The draft National Digital Communications Policy 2018, released earlier this week, aimed to attract $100 billion investments in the digital communications sector, providing broadband access for all with 50 mbps speed and creating 40 lakh new jobs in the sector by the year 2022.
However, industry and analysts had raised concerns over the huge investments sighting the weak financial health of the sector.
Cabinet approval
The Secretary said the department planned to send the policy for Cabinet approval by next month, and start the roll out by July. Once the policy is cleared, a committee would be set up to review levies, particularly the SUC (spectrum usage charge).
The draft proposed to review the levies and fees, including licence fee, universal service obligation fund levy and spectrum usage charges, which are expected to help the debt-laden sector.
Terming the policy “aspirational but not unattainable”, the Secretary said the department would also come out with an institutional mechanism to track the implementation of the policy. Ms. Sundararajan pointed out that one of the clearest indicators an investor takes into account is the growth potential in the market. “Given that India is at 30% penetration, and we aggressively plan to take it to 100% this is undoubtedly the market with largest growth potential.
Consolidation phase
“Currently, there is a phase of consolidation. But the telecom sector is no stranger to similar situations in the past. We have had [a] situation where the whole nature of this sector has undergone fundamentals changes but it has always grown stronger…”
“That is why we are saying that investments will flow into the market in medium to long term…we have set a five-year target, we are not saying that the investments will come in the next 12-months,” she said.
