Duopoly concerns – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/opinion/editorial/duopoly-concerns/article35285906.ece

Our telecom market is big enough for existing majors to thrive, making data accessible

India’s telecom market is on the brink of becoming a duopoly with two of the four major operators struggling to stay afloat. While Bharat Sanchar Nigam Ltd (market share of 10 per cent in the wireless segment, including MTNL) is in such a dire situation that it cannot even pay salaries to its employees, Vodafone Idea (market share of about 25 per cent but falling rapidly) is fast running out of cash, raising concerns about its survival. Affordable telecom services are crucial to ensure equitable access to data — online educational resources, general information, health services, consumer goods and other services. India’s telecom market over the years has been intensely competitive, ensuring that consumers got good deals on tariffs.

In this context, the Centre must take four steps to ensure that the telecom market does not become a duopoly. First, bring down levies and taxes on telecom companies. Telecom companies pay nearly 30 per cent of their revenues to the Centre in addition to the upfront spectrum fees after each round of auction. The concept of revenue share, which was introduced in 1999 when the spectrum was given on subscriber-based criteria, should be done away with. Second, appoint a credible, independent management to run BSNL. The once-dominant public sector company has been reduced to a mere footnote, thanks to years of bureaucratic inefficiencies in decision making. Third, all operators should be given a one-year moratorium on AGR payments so that cash generated from operations can be invested back into rolling out much-needed broadband infrastructure. Finally, reduce the spectrum price for the next round of auction to keep services affordable. This would ensure that the consumers will benefit from competitive intensity in the market. India is expected to have over 900 million active internet users by 2023, up from 700 million now. It is a large enough market for three private players and one public sector company.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s