The government may have just released a draft national telecom policy that states the objective of attracting investments worth $100 billion (Rs 6.5 lakh crore) in the sector by 2022.
The government may have just released a draft national telecom policy that states the objective of attracting investments worth $100 billion (Rs 6.5 lakh crore) in the sector by 2022; however, data released by the Telecom Regulatory Authority of India on Friday show that for the first time, in calendar year 2017 the industry showed a decline on all parameters compared to CY16.
It is to be noted that Reliance Jio started its commercial services in September 2016, leading to a major drop in voice and data rates, which fuelled this decline. With the operators’ gross revenue and adjusted gross revenue (AGR) declining, even the government’s revenue by way of licence fee and spectrum usage charge fell for the first time in a calendar year.
The gross revenue of the operators fell by 8.56% to Rs 2.55 lakh crore in CY17. Similarly, the AGR fell 18.87% to Rs 1.6 lakh crore. Since the operators pay licence fee and spectrum usage charge to the government as a percentage (8% and 5%, respectively) of their AGR, government revenue also declined during the year. Total collections for the government from licence fee came down by 18.78% to Rs 12,976 crore, while revenue from from spectrum usage charges fell 32.81% to `5,089 crore.
Since the decline in revenue and AGR happened despite the rise in industry’s subscriber base, clearly below-cost tariff is the cause. The average revenue per user (Arpu) during CY17 declined to Rs 81 against Rs 119 in 2016.
During the year, the AGR of only Reliance Jio registered growth, while all the incumbents like Bharti Airtel, Vodafone India and Idea Cellular registered a decline.
The AGR of Bharti Airtel declined 24.46% to Rs 36,922 crore; Vodafone’s by 24.14% to Rs 26,308 crore; and Idea Cellular’s by 23.17% to Rs 22,616 crore.
Jio recorded a 2,563.9% jump in AGR to Rs 7,466 crore at the end of 2017 from a negative Rs 303 crore at the end of 2016.