Competition in telecom coming down, says Sunil Mittal
New Delhi: India’s largest telecom company Bharti Airtel on Thursday said it is awaiting a report by a high- level inter-ministerial panel and the government on stress in the telecom sector where competition is “going down” as a result of consolidation.
“We are waiting for IMG (inter-ministerial group) and Telecom Commission report,” Mittal told reporters on the sidelines of the World Economic Forum’s India Economic Summit.
On the state of competition in the telecom sector—which saw fierce tariff wars hitting the bottom line of large telcos—Mittal said “competition is going down”. The telecom sector has been under severe financial strain with a debt load of over Rs4.6 trillion.
An inter- ministerial group was constituted earlier this year to recommend measures to mitigate the financial woes and its report was placed before the telecom commission, the apex decision-making body at the telecom department.
The telecom commission last week approved IMG’s recommendation on extension of time period for payment of spectrum bought in auctions by telcos to 16 years from the current 10 years. The commission also approved IMG’s suggestion of lowering interest rate charged over penalties imposed on service providers.
Addressing a conference, Mittal made the point that while India’s digital vision is strong and so is the support to the programme, the states were not showing “the same level of urgency”. “It is not percolating down to the system. At the states, same level of urgency is not visible. There has to be some programme in the government where they match the vision right down to the gram panchayats, municipal bodies, state governments and create that urgency that this is one pillar for growth in India which is so important that they must pay attention (to),” Mittal added.
The government’s vision is ready, the industry players are rallying behind the vision, and consumers are demanding the services, he said, adding that “yet, there is a big lag from what we want to achieve in India”. In the telecom sector, Mittal stressed, the shift in technology from 3G to 4G and 5G would lead to exponential not incremental changes.
India, with its futuristic networks, will possibly lead the world on certain aspects of telecom. “Very clearly, the market (telecom) has consolidated,” said the Indian telecom czar. Investments in infrastructure deployment too are accelerating, he said, adding that his own company has nearly doubled its network capex this year.
“My own company has spent $3 billion this year only on network capex. This is significant. This is significantly higher than $1.5-2 billion we do every year,” he said. Stating that India’s 4G networks match global capabilities, Mittal highlighted that many companies have started experimenting with 5G.
“I don’t think India will, in any way, be behind... in some cases, it may lead in certain parts of telecommunication. We are investing... I hope others too,” he said.