The Centre is not considering any further equity infusion in Vodafone Idea after conversion of the company’s dues worth ₹36,950 crore into equity. In an interaction with Mint, Union communications minister Jyotiraditya Scindia also said there are no plans to merge the company with state-owned BSNL. On the broader sector, Scindia, who is set to complete one year as minister in the government, said that operators have reached a level of healthy bottom lines and have higher average revenue per user (Arpu), following previous relief measures from the government. Edited excerpts:
Two players are aggressively increasing their market share. Do you think the telecom sector is moving towards a duopoly?
At the end of the day, the customer has to have a choice. The fact is that we do have four players in India. Across the world, there is probably not even a handful of countries that have four players working in the market. In any market, there are a few major players and a few minor players. That is the nature of any fiercely competitive industry. The fact is that the market itself provides the choice, and it is not the government that is providing the market with the choice.
There are millions of customers on Vodafone Idea and BSNL networks and the government has not mandated them to be on their network.
The government has stakes in two companies – BSNL and Vodafone Idea. Isn’t that inefficient in some way?
A. I do not think it is necessarily inefficient to have two competing businesses. There are multiple verticals where the government has competing businesses. Also, there was no physical cash outgo in this (Vodafone Idea) conversion. What the government has retained is an upside, no downside.
Would the government look to merge Vodafone Idea and BSNL?
This subject is in the realm of conjecture. Mergers are less about only business sense but more about culture fits as well, and it is important to look at it from that perspective. There is no thought of merger at this point in time.
Are there any plans to convert more dues into equity for Vodafone Idea if the need arises?
Not at all. The minute you convert more, it becomes a PSU (public sector undertaking), and the cabinet note very clearly says it has to be less than 50%.
But does the telecom sector need more relief as a whole?
The government has stepped in and provided a tremendous amount of relief for the telecom sector and the sector is fiercely competitive but at the same time also extremely remunerative. India is probably a resurgent market for telecom in the world where operators are putting in capex upwards of ₹4.5 lakh crore ( ₹4.5 trillion), with healthy bottom lines and Arpu. We have a data market growing from close to 1.2 GB to almost 21 GB per month. The opportunities are tremendous.
The moratorium on regulatory dues is also expiring this year. So, no relief on the cards for the sector?
Not at this point
Will the government support MTNL for clearing bank debts of over ₹8,000 crore?
As far as the bank debt is concerned, it is very clear that it is going to be made through the monetization of land. MTNL has a huge land bank and assets. Those assets will be disinvested and proceeds from that will go towards paying the debts. We are moving very quickly on that.
Are we going to push for more localization of telecom equipment manufacturing in the country?
Yes. This is the largest market in the world. We are thinking of setting up domestic manufacturing zones and we will have fiscal measures, incentive-based mechanism to ensure that telecom manufacturers locate, co-locate and produce there. It is going to be a plug-and-play model, where we are not going to just provide land, but certification, labs, equipment and all the infrastructure. We will come up with a game plan soon and we will possibly look at Madhya Pradesh to start with.
The process is on. The day they comply, we will give them the licence. The more the satcom companies come to India, the better it is. We want all of them to come in quickly, get the licence, get the IN-SPACe authorization, get the spectrum, and start their business, because through them the last mile—those who are disconnected—will get connected.
When can we expect the satcom services to start?
As soon as the Telecom Regulatory Authority of India (Trai) is done, then we are ready to start.
Do you think there will be subsidies for the satcom service?
We don’t provide subsidies for a service. The market will decide the pricing.
When do you see BSNL stabilizing with customer additions?
BSNL has added close to 55 lakh (5.5 million) customers in the last six months and today has 9.15 crore (91.5 million) customers. BSNL stabilization will happen post the stabilization of 4G service.
Right now, 100,000 4G towers is the target. The company has installed 90,000 towers as on date and commissioned close to about 76,000 towers. By July, BSNL will install all 100,000 towers. We will then measure the quality of services. Once all of that stabilizes, we will see customer additions. Switch to 5G will start only after stabilizing 4G completely.
Do you think there is a need to involve foreign equipment players?
Not at all. What was the need then to develop the Aatmanirbhar solution? It is a fully holistic Indian Aatmanirbhar solution.
Source:https://www.livemint.com/industry/vodafone-idea-bsnl-scindia-telecom-arpu-psu-mtnl-data-market-aatmanirbhar-solution-4g-service-in-space-satcom-11745319837122.html