JOIN USTelecom reforms: Govt expects more players to enter sector, says Ashwini Vaishnaw
With the announcement of a relief package to the telecom sector, the government expects more players will enter the sector as 5G services will be rolled out in the country in coming years.
“The government did not want a duopoly. We believe that there should be healthy competition in the sector. And for that there will be further reforms when the 5G spectrum is auctioned out so that more and more players can get into this sector," Telecom Minister Ashwini Vaishnaw told the media after the Cabinet meeting.
"We always encourage more players in the telecom sector so that the customers will have more choices while opting for mobile phone services," he said.
The officials of the Department of Telecom expect that the moratorium on AGR (Adjusted Gross Revenue) dues will provide an annual cash flow breather of around Rs 14,000 crore while the moratorium on spectrum dues will have given another Rs 32,000 crores of annual cash flow relief for the industry as a whole.
Since key features of the package are on dues related to AGR, which is expected to benefit companies like Vodafone Idea and Bharti Airtel. This move is likely to boost cash flows, lessen financial stress on companies, ensure competition and help to save jobs in the sector, said an official in the Department of Telecom.
Welcoming the decision, the Cellular Operators Association of India Director General S P Kochhar said, "These steps would go a long way in relieving the financial stress the sector is facing, boosting investments, encouraging healthy competition and in offering choice to customers. The announcement is aligned with the telecom industry’s long-standing demands”.
Even the private telecom players also welcome the government decision. Reliance Industries Ltd (RIL) Chairman Mukesh Ambani said that the latest reforms and relief measures will enable the telecom sector to achieve goals set under the Digital India mission.
Furthermore, Bharti Airtel also said that these reforms pave the way for a sustainable three private, one state-owned telecom operator structure.
“The pathbreaking reforms announced by the government today will go a long way in unshackling the telecom sector. These reforms demonstrate the government's firm commitment to ensuring the healthy growth of the industry. The measures also reflect the decisiveness of the Prime Minister, the Telecom Minister, and the government to address long-standing issues," said Kumar Mangalam Birla, chairman, Aditya Birla Group.
Due to hyper-competition in the sector, the debt in the sector has been going up year after year. According to rating agency ICRA, the debt level of the industry is expected to rise to Rs 4.7 lakh crore by March 2022.
The telecom minister also said that Prime Minister Narendra Modi has given the mandate to design and manufacture core and radio access network technology in the 4G and 5G networks of the country in the coming months. He said that indigenous technology will be deployed in the BSNL network in the coming months.
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