Telecom Industry Going Through Stress, But IT IS Temporary: Sundararajan

Saturday, October 28 2017

Details October 28, 2017 Department of telecommunications secretary Aruna Sundararajan acknowledges that the telecom industry is going through a stressful time but feels that it is a temporary phase and as tariffs stabilize, the signs of which are somewhat visible, the sector should be back on the rails.


Department of telecommunications secretary Aruna Sundararajan acknowledges that the telecom industry is going through a stressful time but feels that it is a temporary phase and as tariffs stabilize, the signs of which are somewhat visible, the sector should be back on the rails. Regarding the Telecom Commission recommending only extending the tenure of deferred spectrum payment and not other large-scale measures suggested by an inter-ministerial panel, she said that other long-term measures would be dealt in the new telecom policy which is in the works.

Edited excerpts of an interview with FE’s Rishi Ranjan Kala: The relief given to telecom operators by way of extension in tenure of deferred payment for spectrum is too little, too late. Why so? The IMG concluded that the industry is facing an interim liquidity stress. The group had representations from the finance ministry and banking industry and had done an analysis of the situation in the sector. They had said two things, one, that this is only interim and that this is not a long-term, permanent phenomenon. The second thing they said was that although there was a dip or erosion in revenues, an upward trend was visible. Taking these two things into account, the panel made its recommendations. So I think we are already seeing tariffs starting to move upwards. So we will have to continue to watch the situation. Since spectrum is bought in auctions now and that too at steep prices, why not reduce license fee and spectrum charges?


The industry was unanimous in its representation to the government and the regulator. We will examine this in our consultations with the stakeholders in the process of formulating the new telecom policy which is in works now. What about high reserve prices? The IMG has said that reserve price of spectrum should be reasonable and suggested following international best practices for fixing it. Will DoT adopt this recommendation? Everyone talks about high prices but it is the telecom operators who have driven up the prices to that level by their hyper competition.

I don’t want to say anything right now as TRAI (Telecom Regulatory Authority of India) is doing a consultation on spectrum auction and discussions on NTP (new telecom policy) are going on with all the stakeholders. So let us wait for what kind of recommendations emerge because there are several issues involved. We will take a call keeping in view the recommendations of TRAI and the recommendations of IMG. In the NTP we will be doing a detailed exercise.