1. Reliance Jio effect: As telcos’ ARPUs decline, Telecom Minister Manoj Sinha says operators have seen ups and downs in past too

Reliance Jio effect: As telcos’ ARPUs decline, Telecom Minister Manoj Sinha says operators have seen ups and downs in past too

Telecom minister Manoj Sinha said on Wednesday that the current scenario in the sector, where its revenues and profits are declining, has not happened for the first time and, like in the past, the industry will come out of this situation.

By: | New Delhi | Updated: April 29, 2017 10:54 AM
Total telecom subscribers grew by a little over 2% in January 2017 to 1.15 billion from 1.13 billion at the end of December last year. (FE)

Telecom minister Manoj Sinha said on Wednesday that the current scenario in the sector, where its revenues and profits are declining, has not happened for the first time and, like in the past, the industry will come out of this situation.

“The sector has seen such ups and downs in the past too. It happened in the 2000s. They have come out of it in the past also,” he told reporters on the sidelines on the signing of a MoU for providing broadband connectivity under Bharat Net to post offices in the rural areas. The agreement was signed between department of posts, state-run telcos BSNL and Bharat Broadband Network.

When prodded further on the situation that has led to even the government revenues declining, he said, “See, there are issues of government revenue and also that of consumer interest. We cannot stand on one side. India has a huge consumer base and with the growth in data, I’m sure going ahead financial health will be good. Telecom operators will recover”.

The minister said consumer interest is also very important and already the country has one of the lowest rates across the globe, which is good for the subscribers.

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On spectrum auction, Sinha said they have asked Trai on the reserve price, which is a “preliminary thing”. “It is a process. The decision on timing (of spectrum auctions) is still to be taken”.

After Reliance Jio’s entry in September last year, other telecom operators have seen their revenues and profits decline as they were forced respond to its free offers with low priced bundled plans. This led to a decline in their average revenue per user from both voice and data.

The situation also impacted the government, which saw its revenues from the sector fall for the first time. According to the declining figures of licence fee and spectrum usage charge collection from operators, the Centre is set to lose around `2,055 crore in FY17. Normally, it garners around `25,000 crore by way of these charges in a year.

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