Ambani, Mittal diverge on future of telecom2 min read . Updated: 01 Aug 2020, 06:18 AM IST
- Ambani says users are trapped in the 2G network that has prevented them from fully benefiting from the shift to digital
- Airtel and Voda Idea’s 2G users are voice-only customers who do not substantially add to profits
Billionaires Mukesh Ambani and Sunil Mittal articulated their views on the telecom sector in India on Friday, highlighting the growing divide within the industry over its future and what the two leaders want from the government.
Speaking at an industry event, Ambani reiterated his stance of making India 2G-free, urging the government to phase out slower 2G telecom services in favour of faster networks made possible by 4G and 5G technologies, where Reliance Jio has heavily invested.
Sunil Mittal, chairman of Bharti Airtel Ltd, which has been hurt by a bitter tariff war triggered by the entry of Ambani’s Reliance Jio in 2016, appealed to the government to reduce regulatory payments as well as lower the taxes and levies, including spectrum usage charges and licence fee.
Jio, which claims to have developed an indigenous 5G solution, is the only telecom operator that does not have a legacy 2G/3G network and corresponding subscriber base. Ambani said users are trapped in the 2G network that has prevented consumers from fully benefiting from the digital revolution. “India still has 300 million subscribers trapped in the 2G era. Their feature phones keep them excluded, even from the basic uses of the internet at a time when both India and the rest of the world are standing at the doorsteps of 5G telephony," said Ambani.
At the Reliance Industries Ltd annual general meeting on 15 July, Ambani said the company had developed an indigenous 5G technology. He also announced Jio has partnered with Google to develop a mobile phone operating system, which will help millions of Indians upgrade to smartphones.
While Bharti Airtel and Vodafone Idea have largely phased out 3G networks, 2G users still form a large chunk of their user base. These operators also bear the brunt of massive levies and dues to the government for telecom services.
“India still has some of the lowest data tariffs globally and the industry is barely able to cover the cost of capital. It requires much more support to repair the serious damage to its finances and make it viable for telecom operators to invest in future technologies," Mittal said. He made a case for lower spectrum charges so that it acts as a “force multiplier" and boosts economic momentum. He was implying that the government can generate more revenue from other industries dependent on the telecom sector.
Unlike Jio, which has introduced a 4G-compatible feature phone for low-spending users, Airtel and Voda Idea’s 2G users are voice-only customers who do not substantially add to profits.