Mired in financial, and regulatory hurdles, the telecom sector in India is clearly struggling. With more and more consumers complaining of the poor quality of services and connectivity, the government and the regulator introduced a slew of policy initiatives to provide redress. But the burning question remains: Was it a careful ministration or a half-baked measure?
The problem started with the primary point of contention between the incumbent operators and Reliance Jio over interconnection usage charges (IUC). For the uninitiated, IUC is a fee which an operator, where the call originates, pays to another operator, where the call terminates.
The IUC rates are revised every two or three years. However, the last time the Telecom Regulatory Authority of India (TRAI) considered revising IUC, Reliance Jio demanded to be phased out completely, with the provision of a ‘bill and keep’ model in which telecom operators don’t charge each other for the call that ends on their network.
Reliance Jio’s proposal drew flak from other incumbent operators, who in turn demanded an increase in the IUC which they considered was far below the costs. This led into a series of consultations regarding its order on IUC.
The latest telecom policy, formulated in 2018, was intended to provide some respite to the staggering growth of the sector. It was aimed to help the incumbent telecom operators with two of the biggest issues that plague them – enormous debts and stiff competition from the rising star of the Indian telecom arena, Reliance Jio.
However, the well-intended telecom reform put the incumbent telecos under an increased pressure due to its focus on the transition from physical to digital infrastructure. It pushed for the availability of uninterrupted and high-speed broadband services, in accordance to the Prime Minister’s ambitious ‘Digital India’ campaign.
The extent to which the Indian telecom policy would be able to address the core challenges that the sector faces remains under a cloud of scepticism. Telecom operators are still unclear whether these reforms would help in putting in place a reliable network across urban and rural India, ensure greater usage, and encourage investment, thus relieving the financial stress.
Promises of spectrum harmonization across different bands, focus on indigenisation of technologies for an enhanced rate of job creation in the sector, and the proposals of enhancing the ease of doing business in telecom sector sound like a bright prospect. However, a secure future of the Indian telecom industry depends solely upon whether and how these promises are kept.