1. Budget 2016 top view: 1 Gbps digital India is a distant reality

Budget 2016 top view: 1 Gbps digital India is a distant reality

India continues to be a bright spot in an otherwise gloomy global economy. A thriving mobile telecom industry is one of the key ingredients in a successful economy.

Published: March 1, 2016 12:16 AM

By Himanshu Kapania, MD and CEO, Idea Cellular

India continues to be a bright spot in an otherwise gloomy global economy. A thriving mobile telecom industry is one of the key ingredients in a successful economy. In the past years, the Indian telecom sector has been the engine that has continuously driven the Indian economy forward, contributing over 2% to national GDP directly. Today, besides being the bedrock on which India stays connected and realises vast productivity gains, it is also the genesis of the new-age economy. Flagship programmes like Digital India and Startup India have provided immense impetus to the sector.

Against this high growth backdrop, it is counter-intuitive that the mobile sector has had a dismal year. The mobile telecom industry’s contribution to the national GDP has slipped to under 1.5%, lower than the global average of 4%. With regulatory headwinds such as changes in inter-connect usage charges and roaming charges pegging down revenue growth, the sector is battling profitability pressures.

Despite these challenges, the future projections for Indian telecom are promising. With their services, operators are building one of India’s finest infrastructures — a super-fast digital information highway.

A week back at the Mobile World Congress in Barcelona, leading telecom equipment manufacturers unfolded their vision of mobility where every data connection has a minimum speed of 1 Gbps. India would also have all the elements required to make this vision a reality.

However, this involves radically higher investments and serious long-term support from the finance ministry. An opportunity has been missed to adopt innovative business models that make spectrum available at reasonable prices.

The telecom sector continues to be one of the highly taxed sectors in the country.

A digital literacy scheme covering over 6 crore rural households and a favourable start-up regime are welcome steps as they would bring newer opportunities for the mobile telecom sector.

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