The Telecom Sector Bets Big on NTP 2018: COAI

COAI has shared their detailed submission on NTP 2018 which is an opportunity for the government to bring in the much-needed fundamental change required by the Indian Telecom sector for it to recast and revive. To ensure a sustained, rapid socio-economic growth of the country, the Government has previously rolled out four such policies in the past.

COAI’s recommendations include, enhancing telecom and broadband penetration, simplifying licensing and regulations, efficient spectrum management, uniform Telecom Infrastructure and RoW Policies, lowering of existing levies and taxes, and ensuring ease of doing business by providing an impetus to R&D, skilling, adoption of emerging technologies. With all this, however, increasing Telecom Network Security, while minimizing compliance and cost burden and ensuring privacy of citizens while enabling Digital Revolution in the country, is paramount. If the “digital India” dream is to be realised, telecommunications as a sector and technology democratisation as a tenet, cannot and should not be ignored.

Highlighting the current asks,  Rajan S Mathews, Director General, COAI, said, “At this time, the industry is in a downward spiral. Cumulative debts amounting to INR 4.6 lakh crore on revenues of under INR 1.8 lakh crore are forcing the industry to question the long-term prospects and viability of the sector. The industry has suggested a number of options to the telecom regulator when it was conducting the consultation process, including reduction of Spectrum Usage Charge to a uniform 1% (of AGR) and create a Telecom Finance Corporation as a vehicle to mobilize and channelize financing. Other submissions included the USO fund contribution be rationalised to 3% and ultimately be done away within 2-3 years. The financial health and longer term sustainability of the sector are paramount, without which, there can be no futuristic technologies or scalable innovation.”

“Creating an enabling environment for technologies considered science fiction, just a few years ago – AI, AR, IoT, Smart city, smart  homes, 5G so on and so forth. It will focus on simplifying the regulatory frameworks to aid in quality connectivity-for-all and easing the turf for ease of doing business, make way for foreign investments and strengthen the existing infrastructure" said  Mathews added.

The sector is seeking resolution of a number of issues, including a single unified licence across the country where every service provider offering the same service must adhere to the same rules - One Nation One License for services and making available funds for communication infrastructure projects, on the same lines as that for road and rail networks.  

Huge investments of over INR 2-3 lakh crores over the next couple of years would be required for a fully connected and an empowered Digital India. To achieve this goal, urgent support of the Government and the private sector is necessary to improve the already deteriorating financial health of the sector.

COAI, recommends an investment friendly and stable policy environment where telecom operators can be sustainable enough to invest cash into their business and work together with the Government to connect over 1 billion people to the internet. A report suggests that a 10 per cent increase in broadband penetration leads to a 1.4% growth in GDP. Hence, reviving the sector by enabling existing players to earn profit and make the sector viable for driving foreign investment to boost the overall infrastructure has to firmly be one of the top priorities of the Govt. at present.

While there have been a number of opportunities for the Government in the last few months, including the reduction in the GST rate and the IMG’s recommendations, to bring about systematic changes, but not much has been done yet, while the industry continues to ask for relief. A sharp focus on infrastructure development towards encouraging innovation, indigenous manufacturing and skilling the workforce to make them ready for the next generation of technology, are vital.

For India to be a front-runner in the "Fourth Industrial Revolution", the telecom sector need to be profitable and move away from the current financial instability and regulatory bottle-necks.