A successful auction of airwaves and the launch of 4G services were the high points for India’s telecom industry in 2015 even as the lingering problem of call drops and bottlenecks in infrastructure, notably on
transmission towers, remained major areas of concern.
Early in the year, the country saw the
biggest auction of spectrum when the government garnered Rs.1.10 lakh
crore ($17.6 billion) to licence 380.75 MHz of airwaves in the 900 MHz,
1,800 MHz and 800 MHz and 2100 MHz bands across 17 out of 22 telecom
circles.
The telecom service providers that
participated in the marathon auctioning were: Idea Cellular, Bharti
Airtel, Vodafone India, Reliance Communications, Reliance Jio, Tata
Teleservices, Telenor and Aircel.
While the auction was welcomed, since
availability of spectrum was a major cause for concern, the high bid
prices proved to be a dampener.
“The outcome of the auction, in
whichever manner, eventually led to significant outflow of funds and
further burdened the industry, which remains under a debt of Rs.3.5 lakh
crore ($53.8 billion),” Rajan S. Mathews, director general of the
Cellular Operators’ Association of India, told IANS.
Mahesh Uppal, CEO of telecom consultancy
firm Com First agreed, but said: “The high demand for spectrum made
auctions was unavoidable. The challenge is to design better auctions
where there is less incentive to bid as high as last time.”
But the auction over two straight years
could not stop the menace of call drops. The problem took such a shape
that even Prime Minister Narendra Modi voiced his concern.
Communications Minister Ravi Shankar Prasad even said he did not want to
be remembered as “call drop minister”.
The watchdog, on its part, also
intervened and in mid-October directed mobile phone operators to
compensate subscribers on call drops from Jan 1 at the rate of Re.1 for
each failure — a decision that left the industry upset with legal help
kept as an option.
There was also a related problem. Across
the country, many telecom towers became inoperational as citizens
started complaining that radiation emanating from it are health
hazardous. This took its toll on telephone connectivity.
“The government will have to help by releasing more spectrum and make it easier and cheaper to install towers,” Uppal said.
“Call drops will be resolved when
operators invest in enhancing network coverage. This, in turn, depends
on current availability of spectrum, as well as future roadmap in
receiving spectrum,” Romal Shetty, partner and head for telecom sector
with KPMG-India, told IANS.
India also tried hard to catch up with
the world in telecom technology. BhartiAirtel launched its fourth
generation (4G) communications services in 296 towns across the country.
Britain-based Vodafone launched the same on Dec 14, while Reliance Jio
was expected to do so anytime.
“The 4G ecosystem is still weaker than
3G. For example, 3G devices are cheaper and more numerous than 4G
devices. The 4G technology is new and expensive. The nature and size of
customer demand for 4G is unclear,” Uppal said.
“Internationally, it took three-four
years to roll out 3G and 4G services. We are not far back. Issues
causing delay have been obtaining towers, right of way, RoW (right of
way to deploy some crucial infrastructure) and power availability,”
Mathews said.
“The availability of affordable
smartphones has been another major constraint. Now that some of these
issues have been addressed, we should expect to see rapid roll-out of 3G
and 4G services,” the association chief added.
Another trending activity was tower sale
by various operators. Industrialist Anil Ambani-led Reliance
Communications signed a non-binding pact with the US-based Tillman
Global Holdings and TPG Asia to sell its nationwide tower assets and
related infrastructure for an undisclosed amount. Industry sources
valued it at Rs.22,000crore (nearly $3.4 billion).
State-run Bharat Sanchar Nigam also got
Cabinet approval to hive off its tower assets into a separate company.
BSNL’s chairman-cum-managing director AnupamShrivastava told IANS that
the valuation of it could be in the region of Rs.20,000crore ($3
billion).
Among the big ticket mergers and
acquisitions was Reliance Communications’ accord to acquire the Indian
telecom business of Russia’s Sistema, which operates under the ‘MTS’
brand, in a unique stock-cum-spectrum-fee payment deal.
The government also allowed spectrum
trading in India to help telecom companies to buy and sell unused radio
waves from each other, without waiting for the next round of auction.
Also, spectrum sharing was allowed by the government, which is expected
to improve the quality of telecom services.
Highlights of telecom industry in 2015:
* Biggest spectrum auction over 19 days mopped up $17.6 billion
* Government allowed spectrum trading and sharing
* Watchdog directs operators to compensate for call drops from Jan 1, 2016
* Tariff on national roaming sharply cut
* Service providers gear up for 4G launch
* Global leader Foxconn to invest $5 billion to make devices in India
* Debate starts over net neutrality with draft note awaiting government nod
* Mobile number portability made applicable pan-India
