Read said the pricing environment in India was artificially too low.
British telecom giant Vodafone has alleged that in the last two years there were many regulatory outcomes which worked against the whole telecom industry in India except Reliance Jio.
The comments by Vodafone chief executive officer Nick Read was in response to questions by journalists regarding his views on regulatory and policy regime in India.
Ever since the entry of Reliance Jio, which disrupted the whole telecom industry with free voice and cheap data offerings, the incumbents have faced financial stress. In fact it was because of the heightened competition that Vodafone India and Idea Cellular merged to remain competitive. There were a slew of regulatory decision regarding predatory pricing, interconnect charges etc, which have not gone down well with the incumbent operators.
Read said the pricing environment in India was artificially too low. He termed it artificial because all three operators were haemorrhaging cash. He said it can’t be a sustainable position going forward and therefore at some point, pricing needs to return to a more normalised level and that requires all players to sit back and say what is a healthy industry level.
Due to the decrease in revenues of the telecom players, the government’s revenues by way of licence fee and spectrum usage charge has also declined.
Regarding the integration of Vodafone and Idea Cellular’s network, Read said, “I was in India in October reviewing the strategy. I went back in January and saw the government and the team again. I think we are making really good progress on the integration. We have really accelerated it from 4 years to 2 years…We want to invest in and integrate networks because there is a lot of data traffic and we need performance. We are also raising capital”.
Commenting on Huawei, Read said blocking of Huawei will not be good for industry. In fact, he said Vodafone is using Huawei’s radio equipment to roll out 5G across Europe and only the roll out of core network has been paused. Vodaone Idea has submitted a joint application to the department of telecommunications for doing the 5G trials. In India also, the government is yet to take a final decision on Huawei.