For economy’s sake let telecom live

For economy’s sake let telecom live

More extraction would kill this golden goose.

The telecom network is a key enabler of modernity for the Indian economy. For India to be competitive as many economies, including China, deploy large-scale digitisation of every aspect of production, logistics and services in general, to register a quantum leap in productivity, India also needs to acquire the fifth-generation (5G) communications network that would allow such digitisation, massive generation of data via machine-to-machine communications and generation of actionable insight via artificial intelligence. However, the operational policies that affect telecom are squeezing the life out of the sector. There has to be conscious action to make the sector viable, for the economy to modernise.

At the 5G summit organised by this newspaper, operators not so much bemoaned their woes as measured the distance between the shining city on the hill, the amazing potential of 5G communications, and the slough of despond in which the operators flounder, struggling against the burden of debt weighing them down, the world’s lowest average revenue per user and government policy that jacks up their costs and extracts 31 paise out of every rupee they earn. For Indian telecom operators to build efficient 5G networks, the first prerequisite is to make the needed spectrum available at competitive rates. Telecom regulator Trai has recommended ridiculously high reserve prices that would peg just the cost of acquiring the 80 or so MHz of spectrum needed, at least, to build an efficient 5G network at ₹40,000 crore. This would burden the telcos and increase the cost of 5G communications for the consumer. The price of spectrum should be discovered through auction that is not distorted by a high floor price.

The Supreme Court is hearing a dispute over a revenue claim on the telcos worth ₹92,000 crore, of which some ₹23,000 crore are the disputed dues and the rest represents penalty and accumulated interest. The least the government could do is to waive the penalty and interest, for there would be no 5G for the Indian economy, if there is no telecom industry left to deliver it.