Over the past two decades, the telecom industry has witnessed several achievements as well as challenges on the financial, regulatory, policy and service delivery fronts. These experiences have helped shape an industry that today serves as the backbone of digital services in India. Even during the ongoing Covid-19 pandemic, the telecom industry has emerged as a key support sector to ensure life and business continuity. On the completion of 25 years by the Indian wireless telecom industry, Rajan S. Mathews, former director general, Cellular Operators Association of India (COAI), talks about the years gone by and the road ahead for the sector. Excerpts…
How has the telecom industry evolved over the past 25 years? What have been the key achievements and setbacks?
One of the major achievements has been the growth of teledensity from 6-7 per cent in 1995 to around 85 per cent today. The second achievement is technological progress. We started off with 2G, went to 3G and now we have progressed to 4G and are looking at 5G. The third major achievement is that we have evolved significantly in terms of broadband connectivity. Today, we have about 650 million broadband connections. And of course we have been able to achieve all of this while ensuring service affordability for customers.
There have been challenges such as very high spectrum costs. In recent years, the financial health of the sector has deteriorated dramatically because of the huge debt pile-up. As a result, the industry is finding it hard to invest in new technologies, and in network upgradation and expansion. Further, issues around right of way remain unresolved.
What have been the major policy reforms and industry campaigns during this period?
The National Digital Communications Policy (NDCP) can be seen as a major policy reform. The policy focuses on providing connectivity to gram panchayats and villages. Another big policy move has been India’s increased involvement in the global technology society to make the country 5G ready.
What are your views on the industry’s current status in terms of financial position, policy framework and market structure?
In terms of market structure, we have gone through a period of consolidation, which is a good thing. A reduction in the number of players means that there is less pressure on spectrum. However, in the past two to three years, there has been a significant decline in the financial health of the industry. The recent AGR decision by the Supreme Court has put an additional debt burden on the industry when it could not be afforded. Meanwhile, the government continues to impose licence fee, spectrum usage charges and goods and services tax on items that are globally never charged as a service. This is not a sustainable financial proposition for the industry.
Further, we had a detrimental price war with the entry of Reliance Jio, which weakened the financial health of incumbent operators. Fortunately, this appears to be changing and turning around.
How has the Covid-19 pandemic impacted the industry?
One industry that has proved itself absolutely essential to the health and economic well-being of the country is telecom. If our network was not in place, people would not have been able to stay connected, conduct their business and carry on economic activity. Pre-Covid, we contributed about 6 per cent to the GDP and now we are contributing about 35 per cent.
Our networks were up and running 99.9 per cent of the time, providing bandwidth, speed and continuity. The whole fabric of our economic and social activity is now relying on mobile networks. This is something that has happened as a result of the Covid-19 pandemic.
What role do you expect the telecom industry to play in the next decade?
We will continue to play a very significant role. Operators will now have to make massive investments in upgrading networks. Unfortunately, the financial health of the industry is creating a challenge. We are hoping that the government will take that in consideration and provide some relief to the industry.
How do you see India’s telecom technology landscape shaping up in the coming decade?
We definitely see the country getting ready for 5G. We are beginning to see cloud computing and edge computing being rolled out. There is greater focus on artificial intelligence as well. The internet of things is enabling remote learning, remote health delivery and remote logistics. The government has also begun to look at quantum computing and quantum security. It is also looking to free up and privatise satellite technology to provide bandwidth and coverage.