Telecom minister reports on health of mobile sector

30 Mar 2017

The Indian government has seen a steep decline in licence fees and spectrum usage charges in the first three quarters of the current financial year (ending 31 March 2017) Telecom Minister Manoj Sinha told the Rajya Sabha – the upper house of India’s parliament – in response to questions regarding the health of the sector. The Economic Times cites Mr Sinha as saying that licence fee collections fell to INR34.5 billion (USD531 million) in the October-December period (fiscal Q3) from INR39.8 billion in the first quarter, whilst spectrum usage charges dropped by 22% to INR15.5 billion over the same period. The official attributed the fall in government in revenue to the tariff war sparked by the free promotional offers introduced by newcomer Reliance Jio Infocomm (Jio) in September 2016. When asked about the rules governing such promotions, Mr Sinha explained that the offers are limited to a 90-day duration, adding that the Telecom Regulatory Authority of India (TRAI) floated a consultation paper on the principals of tariff assessment in February this year, and may choose to alter the guidelines after reviewing the responses.

On a more positive note, the minister informed the government that there had been a reduction in dropped calls after the nation’s cellcos installed a combined total of 325,000 new base stations between July 2015 and February 2017. As noted by TeleGeography’s GlobalComms Database, the matter was a bone of contention between regulators and operators in late 2015/early 2016, with authorities attempting – unsuccessfully – to impose automatic financial penalties on providers for dropping calls.

Regarding the ongoing process of consolidation in the market, meanwhile, Mr Sinha explained that the mergers of Bharti Airtel and Telenor India, Idea Cellular and Vodafone India, and Reliance Communications (RCOM), its subsidiary Reliance Telecom (RTL) and Aircel, were all under consideration and had yet to be approved by the National Company Law Tribunal. However, he remained confident that there would be sufficient competition in the market post-consolidation, as there are expected to be six operators left in each of India’s regional telecoms operating circles.