New Delhi: The telecom sector needs an enabling regulatory environment as the growth of the sector is key to the digital transformation of the Indian economy, industry leader Kumar Mangalam Birla said on Monday.
Birla is the chairman of Vodafone Idea Ltd — India’s largest telecom operator by subscriber base.
“We seek an enabling regulatory environment so that we can make the necessary investment in this sector...we look forward to working with the government to take the leap for the next wave of growth," Birla said in his speech at the inauguration of the India Mobile Congress.
The statement comes in the backdrop of the latest war of words that has emerged between Reliance Jio and rivals Airtel and Vodafone Idea after the telecom regulator sought to review the move to scrap interconnect usage charges. Jio wants IUC to be scrapped as it is a cost for it, while Airtel and Vodafone Idea want the 6 paise a minute charge to continue as both earn revenue from the charge.
The three-day India Mobile Congress is India’s attempt to showcase itself as a vibrant telecom market and woo investors
Kumar Mangalam Birla’s statement comes two weeks Vodafone Group chairman Gerard Kleisterlee and CEO Nick Read came to India.
The two executives were expected to meet Prime Minister Narendra Modi and telecom minister Ravi Shankar Prasad but could not as Modi was in Chennai while Prasad was in Bihar monitoring the flood situation. Instead, Read and Kleisterlee had a half-an-hour meeting with telecom secretary Anshu Prakash. Vodafone Idea CEO Ravinder Takkar was also present at the meeting.
Vodafone has sought lowering of levies paid to the government and easier payment schedule for spectrum purchases.
Birla’s statement also assumes significance given the loss-making Indian entity has been witnessing a fall in revenue generation streams, and comes over two months after Vodafone Idea Ltd, which is in the midst of a complex integration process, said its chief executive Balesh Sharma has resigned citing “personal reasons" and was replaced by Takkar.
Sharma’s exit came less than a year after the merged entity started operations on 31 August 2018. The merged company has since lost market share and posted losses in every quarter of the past year, amid a bruising tariff war.
Vodafone India and Idea Cellular announced their merger in March 2017 in response to the entry of Reliance Jio Infocomm Ltd in September 2016.
Vodafone Idea has so far completed the network integration process in 11 of 22 circles and hopes to complete the rest by June 2020. Despite the merger, Vodafone Idea has been facing a rough ride, with shrinking revenue and gross debt of ₹1.2 trillion as on 30 June.
Since the completion of the merger, the company has lost subscribers every month. Its active subscriber base declined from 334.1 million in the March quarter to 320 million in the June quarter.
Because of the customer churn that was triggered by the introduction of minimum monthly recharge plans in November to weed out low-paying users, Vodafone Idea’s revenue fell 4.3% to ₹11,269.9 crore in the June quarter from ₹11,775 crore in the preceding three months.
The telecom operator had posted a loss of ₹4,873.9 crore in the June quarter, despite witnessing higher data consumption on its network and signing up more 4G subscribers.
Before that, the company posted a loss of ₹4,881.9 crore in the March quarter, ₹5,004.6 crore loss in the three months ended December, and ₹4,973.8 crore in the September quarter.