Issues around telecom industry’s health even more relevant now : COAI,check details

The industry’s long run viability is vital to ensure robust, ubiquitous telecom services, and issues related to financial health are now more relevant for the industry that has kept the nation connected during the pandemic, COAI has stated. Industry association COAI – which represents telcos like Reliance Jio ,Bharti Airteland Vodafone Idea – stated that the price discovery formula for 5G needs to be given a thorough thought, in regards of positive rub-off effect the new-age technology will have on all other existing sectors.

The government should, therefore, look at “primary revenue from telecom” in perspective of “secondary revenue” that would accrue from other sectors that harness the benefits of next-gen technology, it claimed.

“Financial health of the telecom industry is not good, everyone knows about it. Not much has been done to help improve the fiscal health and industry has its back to the wall in trying to cope up. And now if they have to shell out huge amounts of money for 5G auctions then it will be very difficult for the industry to find the money for that,” S P Kochhar, Director General, Cellular Operators’ Association of India (COAI), told .

The sector’s demand in regards to remove the legacy levies, taxes, rationalisation of USOF (universal service obligation fund levy), and other measures for long-term viability, are recently more vital than ever, Kochhar said.

“If anything they have become more relevant…Telcos are very clear, that they want to roll out networks and services for the benefit of citizens…Obviously, the input cost has to decrease, that is a very logical,” Kochhar mentioned.

According to the COAI, the start of 5G will open up massive possibilities and fuel growth for other industries as well, and hence the consideration and basis for 5G auctions cannot not be the same as 4G.

“What we had so far was clear business use cases, where it was only subscriber talking to a subscriber. With 5G, the vistas are large but it will take time to build up…With 5G coming, all industries, without an exception, will get empowered and their revenues streams will increase manifold because of 5G… it will improve their production capabilities, efficiencies…the revenue which accrues to the government from such industries, riding on 5G, is going to be manifold,” Kochhar added.

Hence, if the initial revenue is reduced, and robust, next-generation network is sorted out, the secondary revenue accruing from beneficiary sectors would be far more. This approach would compensate manifold for any shortfall on account of primary revenue, he claimed.

Telecom services had shifted from being viewed as a status symbols at one time, to being a lifeline for the economy and society, during the pandemic.

“The recognition has to come that telecom is indeed as an essential service and must be treated as one. If telecom is an essential service it has to be maintained and to maintain it, the provisioning has to be done at a cost which is viable. If you have to ubiquitous telecom service across the country then input costs have to go down and it has to be made a viable sector, in which telcos can invest and provide networks of requisite grade,” he said.