Telecom minister Ravi Shankar Prasad needs to address five issues shared by Vodafone India CEO & Managing Director Marten Pieters.
These issues are impacting the Indian mobile service provider industry. India has around 900 million mobile subscribers.
What Marten Pieters said at Economist India Summit
The Indian telecom industry is in a mess because of the thinking that more rivals make a better industry.
In fact, competition increased but telecom operators stopped or reduced their investments in India because of huge debt. You can see Airtel selling its towers to repay debt. African telecom operator MTN did not pursue its interests in India because India is an unpredictable market. Vodafone’s multi-billion tax issue and Nokia’s challenging situations are examples. Incidentally, these companies need to wait for years to know the outcome of their issues. Indian telecom operators are pricey because of their spectrum value and not because of user-base.
The current telecom industry structure is the responsibility of the government.
Congress led UPA government ruled India for the last 10 years. We saw telecom ministers such as Kapil Sibal, A Raja, etc. working and giving poor result. Achieving 900 million mobile user base is no big deal because ARPU is still in a couple of dollars. Plus 900 million is not the active user base. Yet-to-take off Bharat Broadband, Rs 5,000 crore-plus North East telecom package and lack of vision for Digital India are the result of poor planning earlier.
Vodafone CEO says there is very little action to take that responsibility.
The BJP Government is celebrating 100 days in power. But the industry is not seeing any positive response to its issues. Bharti Airtel recently said it will look for compensation from the government for delaying its spectrum allocation after making payment. CBI has found that former telecom minister influenced Aircel promoter Shivashankaran to sell his stake in Aircel to Maxis.
China telecom market is profitable. China Mobile, China Unicom and China Telecom are doing well. They have better infrastructure as well.
For telecom operators to become more profitable, Indian mobile subscribers should start earning more. For this, Prime Minister Narendra Modi should try to revive the economy and the per capita of income of 900 million plus mobile subscribers. If the majority of money is going to 10-20 percent of India’s population, India will not become an America.
Last year China telecom operators invested $50 billion in its networks, whereas the Capex of Indian telecoms such as Bharti Airtel, Idea Cellular, Vodafone, etc. was $5 billion.
The huge gap in Indian telecom Capex and China investment is because of regulatory uncertainty in the country. Mobile operators do not know how much spectrum they can get in the next 3-5 years. They have no clue about new tax obligations.
Vodafone CEO is not confident about the success of PM Modi’s Digital India vision. This is because bureaucrats are yet to change their working style. PM Modi says there is no red tapism in India and there’s only red carpet.
We cannot believe that broadband, the backbone of Digital India, is not available across the country even after celebrating 20-years of NTP 1994. It’s time for action and achieving targets and not giving press interviews and sending tweets.
PMO (prime minister’s office) of India should not become a CMO (chief marketing officer) of BJP that needs to win future elections.