Competition intensified since 2016, when Reliance Jio stormed into the market and offered lifetime free calls and cheap data (Mint file)
Competition intensified since 2016, when Reliance Jio stormed into the market and offered lifetime free calls and cheap data (Mint file)

Govt wants fair competition, will not encourage monopoly: Prasad to telecom CEOs

  • Telecom minister Ravi Shankar Prasad assured industry CEOs of the government's full support on outstanding issues such as cut in levies and refunds
  • The telecom sector is reeling under severe financial stress with a cumulative debt of over 7 lakh crore

New Delhi: The government on Saturday told the telecom industry that it wants fair competition in the sector and will not encourage monopoly, while asking companies to prioritise quality of service and ensure "robust involvement" in 5G as well as a blueprint for the $5-trillion economy.

Telecom minister Ravi Shankar Prasad, who met industry honchos, also assured them of the government's full support on outstanding issues such as cut in levies and refunds.

"I spoke to them about the need for a robust involvement of the industry in 5G innovation, startups and creation of 5G products that can create India-specific patents. I said that in the $5-trillion economy target, 25% should be telecom's contribution," the minister said after meeting industry CEOs.

Prasad's first interaction with the industry after he took charge of the telecom portfolio comes at a time when the sector is reeling under severe financial stress with cumulative debt of over 7 lakh crore. Saturday's meeting was attended by Bharti Airtel CEO Gopal Vittal, Vodafone Idea's Balesh Sharma, Reliance Jio board member Mahendra Nahata and BSNL chairman P K Purwar.

Prasad said he had already taken up outstanding issues such as inputs tax credit and lowering of GST rate with the finance ministry, and said a proposal pertaining to the reduction of universal service obligation (USO) levy was also under the Telecom Department's consideration.

"I have asked companies to look at improving the quality of service. Also 43,000 villages are uncovered at present. I have told the industry to pool in their resources so that in one year, we can reach all the uncovered villages and they have agreed. The Department of Telecom (DoT) will provide all assistance," Prasad said.

The minister also asked companies to look at improving connectivity and digital ecosystem in religious sites such as Kedarnath and Badrinath. The minister assured the industry of its support on the issue of installation of telecom towers. The industry flagged the issue of lapsed bank guarantees, which they want returned and the ministry has asked the DoT to urgently look into the matter.

"I have assured them of three things...We want a fair competition. The government will not encourage any monopoly and will do its best to ensure ease of doing business," Prasad said.

The telecom sector is burdened with staggering debt levels and cut throat competition. Competition has only intensified since 2016, when Reliance Jio stormed into the market and offered lifetime free calls and cheap data. Jio's offerings forced rivals to slash rates, affecting profit margins. Since the launch, rivals have either teamed up via merger, resorted to acquisitions or folded up.

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