The Indian telecom sector has been in the news a lot over the past few years for all the wrong reasons. The 2G scam that surfaced during the UPA led government delivered a huge set back to the telecom sector due to the Supreme court verdict cancelling 122 telecom licences which led to companies like Etisalat and Batelco to quit the Indian market.
Also the regulatory uncertainties have prevented foreign companies from looking at India as a viable investment destination in spite of being the world’s second largest telecom market by subscriber base. It is the retrospective changes in policy and fear of litigation and lack of security of investment that has prevented foreign operators from raising their stakes in their Indian joint ventures even after the FDI in telecom was raised to 100% last year, companies like Russia’s Systema and Norway’s Telenor have yet not raised their holding to 100%.
Other issues that have plagued the telecom sector is the lack of transparency in the Merger and acquisition policy and spectrum trading, under the UPA led government a huge quantum of valuable spectrum in 700,800,900,1800,1200 MHz bands was kept unauctioned for no reason, which created a false spectrum scarcity and effected the quality of services.
In a recent press statement the new telecom minister Mr. Ravi Shankar Prasad has addressed all these issues and has promised to bring reforms in all of these aspects to ensure an overall better health of the telecom sector that benefits both the operators and the consumers. The key points from the press statement are mentioned below-
- Focus on a transparent and fair decision making process to restore investor confidence and promote 100% FDI from foreign operators
- To relax the Mergers and Acquisition norms and spectrum trading policies to encourage consolidation in telecom sector.
- To auction the spectrum lying vacant with the government and to adopt a friendlier pricing to promote greater participation and bidding in auctions.
- To adopt a softer regulatory mechanism and sort out issues of litigation
- To sort out issues regarding levy of one time spectrum usage fee on telcos holding spectrum beyond a certain limit.
- To resolve the conflict between TRAI and DOT over the pricing and auction of airwaves in the 800MHz band
- Improving quality of service for consumers and enabling mobile access to rural areas
- Implementing the New Telecom Policy 2012
All this sounds very promising for the growth and development of the telecom sector in India. Let us know your views and opinions through your comments.