By Raja M
NEW DELHI: India has got yet another full-time telecom minister — a senior leader of the ruling Bhartiya Janta Party (BJP), and close confidant of Prime Minister Narendra Modi — Ravi Shankar Prasad who is also holding Law and IT portfolios. This, at a time when the industry is plagued with multifaceted deterrents.
Prasad, no new to the telecom sector, has become the Minister of Communications for the second-time after his previous stint from May 2014 to July 2016, before his colleague Manoj Sinha took over as the Minister of State of Telecom.
The cash-strapped industry, now reduced to a three private-player market post-market consolidation is already going through difficult times.
Once the burgeoning sector of the Indian economy, to one with a debt of nearly Rs 8 lakh crore now, the ability to spend on networks has apparently diminished while the industry is on heels to excel the Prime Minister Narendra Modi’s ambitious Digital India – that broadly envisages making m-Governance, a reality.
The ailing industry, following Jio’s disruptive foray in September 2016, has made several representations to the Department of Telecommunications (DoT), and various demands include spectrum at a reasonable price and rationalisation of levies. But, will Prasad hear them out? The sector has high hopes though.
With telcos under stress, the multinational vendors such as Nokia, Ericsson, and Huawei – the traditional gear suppliers to Sunil Mittal-driven Bharti Airtel and Kumar Mangalam Birla-headed Vodafone Idea, a merged entity from erstwhile Vodafone India and Idea Cellular, have a cascading effect.
On the back of hyper-competition and average revenue per user hitting rock-bottom, delayed telco payouts and slower network expansion have led companies to cut their operational cost, and that has also recently triggered layoffs which were aimed to rationalise workforce in the ongoing complex situation.
So, before the countdown to fifth-generation (5G) starts, the new minister has a role to bring the house in order with greater trust and impetus to the sector that also included a much-needed clarity on the usage of equipment from the controversial Chinese gear maker Huawei Technologies.
The scenario at domestic equipment companies, who have profoundly cheered Modi’s Make in India vision when he was first elected in 2014, and government’s continued support to Preferential Market Access (PMA) policy, are now in acute despair. To bring trust back is a bit challenging for Prasad.
The domestic firms such as Sterlite Technologies Limited (STL), Vihaan Networks Limited (VNL), Himachal Futuristic Communication Limited (HFCL), Tejas Networks and Vindhya Telelinks Limited (VTL) are even finding it hard to recover as much as Rs 1,500 crore in dues for the government-funded projects pending for several quarters.
The agony does not end here. Despite Make in India hoopla that promises to promote indigenous companies, the telecom department has miserably failed to address their pain points, and the officials’ prejudice against state-led Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), has led to ‘engineered efforts’ to derail mega programs including connectivity in uncovered villages.
The local telecom players are though not very certain whether Prasad, a senior Supreme Court attorney, would do justice to them by at least kickstarting the nonstarter programs. For instance, BSNL-driven prestigious Northeast- I connectivity initiative has been dragged by almost five years now, from the time when it was originally approved by the Cabinet in September 2014.
In August 2018, former telecom minister Manoj Sinha admitted in the Lok Sabha that as many as 43,088 villages in India lack basic telephony services.
State-run BSNL that employs 1.75 lakh workforce is too looking at the new minister with high hopes.
Prasad, in his previous term, has asked BSNL leadership to turn a corner, and India’s fourth-largest operator, in all its efforts, was able to grow income from services to 4.16% to Rs 27,242 crore in 2014-15, the highest in the last five years.
Anupam Shrivastava-headed telco has taken a slew of initiatives including internal cost-cutting, network sharing, aggressive enterprise business strategy, and other newer revenue opportunities which enabled the telco to compete with private sector rivals head-on.
The department’s step-motherly treatment has become obvious lately. The service provider has so far not received fourth-generation (4G) spectrum and its revival plan that included assets monetisation and voluntary retirement scheme (VRS) has been further dragged, making it virtually impaired.
Will the new minister listen to state-owned telco’s woes? Prasad would have a hectic time listening to every stakeholder and making his presence felt with ‘actionable to-do list’ cutting down the existing red-tape in the department.
In the Information Technology (IT) space, the much-needed data protection law is expected to be cleared by the Cabinet sometime soon, and local electronics manufacturing which under his previous term has demonstrated well further needs to bring in some big-ticket investments.
(Raja M is a freelance writer. Views expressed are the author’s own)