Telecom is an important enabler for Digital India

By: |
February 26, 2016 12:00 AM

Shouldn’t telecom be treated as an essential service like power?

A journey of a thousand miles begins with a single step. It’s just over two decades since mobile telephony, which has transformed millions of lives, was introduced in India, and the telecom sector finds itself once again poised at a juncture where the ‘right’ step is critical for its next phase of evolution.

Digital India, the vision articulated by Prime Minister Narendra Modi, has, within its framework, the potential to transform our country in entirety by bringing all technological, economic and social initiatives under one unified umbrella—for the holistic development of the nation.

The mobile technology and its platform is most vital for realising this vision. Since the introduction of mobile telephony in 1995, seamless connectivity and easy availability have made it the engine for accelerating inclusion and propagation of information. Across sectors—education, empowerment, agriculture, healthcare, financial inclusion, rural outreach—the progress enabled by mobile is unparalleled.

Just as the success of banking sector is critical to the nation’s economy, the triumph of Digital India rests on the robustness of its telecom sector.

Making the right calls

With mobile subscriber base having crossed the 1-billion-mark, the next big opportunity is to accelerate this power in the hands of the masses to boost GDP, improve inclusion and reduce wastage and leakages.

With just about 120 million broadband connections, we are lagging far behind other comparable developing economies. In fact, even the basic connectivity is not available to the bulk of rural India, and there is a growing digital-divide between urban and rural connectivity.

The telecom sector requires significant volume of investments to be made consistently, with a long gestation period of many years. Advances in technology and evolving consumer demands ensure that thousands of crores need to be spent towards capital expenditure each year to expand and upgrade networks.

For too long, this sector that facilitates connectivity and fosters innovation across industries by creating new models of engagement has been the victim for funding deficits at various levels of government—central, state and local bodies. Several controls have been put that restrict revenue growth and the already high level of levies are further rising.

The telecom sector is at a critical stage, where it is getting bogged down by the weight of its huge debt burden (over R3 lakh crore at last count and growing). This precarious level of debt is stressing the banking sector as well, and with a fresh round of spectrum auctions planned in FY17, the debt levels will only rise.

In revenue terms, the sector contributes around R70,000 crore to the exchequer every year—which is 3.5% of GDP. Hence, it is vital to ensure that the telecom industry remains financially strong and sustainable to invest the estimated R5 lakh crore required over the next five years for spectrum, technology, equipment and fibre backbone.

It’s time telecom, both as a service and infrastructure, be considered as a resource of national importance. To enable Digital India, adequate quantum and quality of spectrum must be made available at a fair price. At least 3-4 telecom service providers should have a pan-India 4G spectrum footprint of minimum 20 MHz each in efficient frequencies.

Given the complexities of the telecom industry, the multiple jurisdictions, its importance in connecting a large country with 16% of the world’s population, and the critical role it plays in nation-building, the need is to incentivise the sector for propagating Digital India. Shouldn’t telecom be treated as an essential service like power? Is that something we could see in Budget FY17?

The author is managing director & CEO, Vodafone India

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