Reliance Jio says India is 5G-ready, rivals complain of financial stress
While Ambani said that India offered “hope and promise”, his rivals had a different story to tell.
New Delhi: India’s top three telecom operators gave contradictory views on the future of mobile telephony in the second edition of the India Mobile Congress.
While Reliance Industries Ltd (RIL) chairman Mukesh Ambani said India will be a fully-4G country by 2020, ready for 5G, Bharti Enterprises chairman Sunil Mittal urged the government to offer tax relief, and Vodafone Idea chairman Kumar Mangalam Birla asked for leveraging technology and investments before moving to 5G.
At the inaugural session of the three-day event on Thursday, Reliance Jio demonstrated multiple live 5G trials ranging from driverless cars, surveillance drones, and aerial disaster management vehicle SKYSHIP, with facial recognition features for rescue activities. Airtel also showcased a 5G-enabled self-operated drone for disaster response and monitoring.
The ongoing tariff war post the entry of Reliance Jio in September 2016 has forced several telcos to shut shop or merge with bigger peers to survive.
“While India’s consolidation has not happened in an orderly fashion, other than the Vodafone-Idea merger, many operators have had to go through significant pain, a lot of job losses have happened...$50 billion have been written off...but we have finally arrived at a point where we are at a right industry structure,” said Mittal.
While Bharti Airtel acquired Telenor India and Tikona Digital Networks, Vodafone India and Idea Cellular merged to become the largest telecom operator in India. Aircel is in the midst of insolvency proceedings, while Reliance Communications awaits final approval to sell its assets to RIL’s Jio.
Revenues of all operators, except Jio, fell in the past several quarters. According to data from the Telecom Regulatory Authority of India, the sector’s adjusted gross revenue was ₹36,552 crore in April-June, a 8.1% drop from a year earlier.
“The sector is facing many challenges...and is in considerable financial stress,” said Vivek Badrinath, chief executive, Africa Middle East Asia Pacific, Vodafone Group.
“Each rupee can only be spent once, so a new balance must be struck between fiscal requirements and the need to enable investment to support economic development.”
Operators, who are liable to pay 3-5% and 8% of the adjusted gross revenue as spectrum usage charges and licence fees, respectively, to the government, have for long been pitching for a cut in levies.
“On one hand, we have the Prime Minister’s vision of a digitally-enabled India, which requires tremendous investments, and on the other, we keep spectrum prices very high, licence fee is high, spectrum charges are high and GST is at 18%, which is almost at the highest tax bracket. We cannot have these two competing positions in the industry, said Mittal.
“On one hand, a very important industry which is enabling India to be embracing digital medium, on the other hand, this industry remains taxed like the tobacco industry.” While rivals complained of financial stress, Ambani said India offered “unprecedented hope and promise”.
“India has moved from 155th rank in mobile broadband penetration…to being the number 1 nation in mobile data consumption in the world… in less than two years. This is the fastest transition anywhere in the world from 2G/3G to 4G. By 2020, I believe that India will be a fully-4G country… and ready for 5G ahead of others.”
After disrupting the wireless space with cheap data and free voice calls, Jio in August opened registrations for its fixed line broadband offering Jio GigaFiber through which it aims to build a home-and-office connectivity platform for 50 million homes. “I believe India will rise from a lowly 135th rank…to be among the top three nations in fixed broadband…at a pace that will surprise the world,” said Ambani.
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