Text Size: A- A+

New Delhi: India’s shift to 5G as well as its plans to empower villages through the internet seem to have hit a hurdle in the trillions of rupees worth of debt crippling the telecom sector.

Besieged by a cut-throat price war for India’s growing internet and smartphone market, especially since the launch of Reliance Jio and its uber cheap 4G in 2016, the telecom sector is saddled with an estimated debt of Rs 7.7 trillion.

Further put off by the reserve price set by the Indian government for the proposed 5G spectrum auction — Rs 492 crore/Mhz — none of the players is ready to bite in just yet.

And hanging in the balance is not just the adoption of 5G in India, but also the UPA-era rural internet connectivity project BharatNet (earlier known as National Optic Fibre Network), which is now a key component of Prime Minister Narendra Modi’s Digital India push.

Fears among telcos

As he took charge of the Telecom Ministry Monday, Ravi Shankar Prasad tweeted that the government plans to hold the 5G spectrum auction in 2019, besides vowing that it will uphold the interim budget promise of setting up one lakh digital villages by 2024.

We will strive to hold telecom spectrum auction within the current calendar year: @rsprasad — RSPrasad Office (@OfficeOfRSP) June 3, 2019

Setting up 1 Lakh digital villages, which were part of the budget promise, will be expedited. Assets of Bharat Net will be leverage for improving digital service delivery: @rsprasad — RSPrasad Office (@OfficeOfRSP) June 3, 2019

The telecom sector has, however, made it clear that it cannot afford 5G spectrum at the current reserve price, which was set by the Telecom Regulatory Authority of India last year and is nearly four times the Rs 131 crore/MHz fixed by South Korea.

Of India’s two biggest telecom companies, Vodafone-Idea has suggested holding the auction in 2020, while Bharti Airtel chairman Sunil Mittal has said the company won’t bid for the spectrum at current pricing.

The wariness of telcos means the government may not be able to maximise its revenue from the telecom sector. Only 40.97 per cent of the spectrum up for auction was sold in 2016, with no auctions held in 2017 and 2018.

According to Department of Telecommunication (DoT) data, the revenue/MHz yielded by the 2016 auction was lower compared to that for 2014 and 2015. Against Rs 173.17 crore/MHz in 2014 and Rs 272.40 crore/MHz the next year, the revenue for 2016 was Rs 67.17 crore/MHz.

The debt is also said to be keeping the private sector from bridging last-mile connectivity gaps holding up BharatNet, an initiative meant to bring India’s 2.5 lakh gram panchayats on the internet map that will be the backbone of India’s digital village project.

A digital village or ‘digi-gaon‘ will be one where residents have access to “tele-medicine, education and skills through use of digital technologies”, with the ultimate aim of making each village a “self-sustainable unit”.

In a written reply to Parliament last year, former telecom minister Manoj Sinha said that, as on 2 December 2018, approximately 1.22 lakh gram panchayats had been connected through 3.01 lakh km of optical fibre cable. Of these, he added, 1.16 lakh were “service-ready”.

Also read: Can’t wait no more, says Huawei as India holds off decision on choosing firm for 5G trials

Who’ll bridge the gap?

Rajan Mathews, the director general of the Cellular Operators Association of India (COAI), an industry body for telcos, sought to explain the ground situation on the sidelines of an event Tuesday.

“The government went ahead and laid fibre connecting block headquarters (a jurisdictional area) and gram panchayats,” he said.

“This fibre can transmit 5G traffic as well so that’s not the problem. The problem is the BharatNet fibre network does not extend to the district headquarters-level, where private telecom operators’ fibre networks are located, so it was difficult for private operators to provide end-to-end service on fibre, using the BBNL fibre network.”

BBNL or Bharat Broadband Network Limited is a government entity that, along with BSNL, worked on setting up infrastructure for BharatNet.

And no one is taking responsibility to bridge this gap.

“[The] government assumed the telecom companies will invest in setting up the rest of the network,” Mathews said. “But as of now, this is not commercially feasible, likely due to telecom debt and financial stress of operators, and perhaps there is little commercial incentive in serving some of the rural areas.”

Sanjay Nayak, CEO and managing director of Tejas Networks, a communications equipment company that served as a vendor for BharatNet project, agreed.

“It will be difficult for private telecom operators, who are facing financial challenges due to competition and low ARPUs (average revenue per user), to stretch themselves and extend their reach in non-metro areas (such as gram panchayats), where services are likely to be unviable,” he told ThePrint.

“This is the very reason that the government, using BBNL, can step in and build the network and offer broadband services,” he added.

Former DoT official Rakesh Kumar Bhatnagar, who was a member of the expert committee that formulated the 2018 telecom policy and is part of the inter-ministerial panel monitoring 5G field trials, said “one reason for poor last mile-connectivity is insufficient infrastructure like a fibre network”.

He added that DoT’s Universal Service Obligation Fund (USOF), which oversees BharatNet, “has ample funds to set up this required infrastructure”.

“But someone has to demand that it be done, perhaps the relevant MLA or MP,” said Bhatnagar, who is now director general of the government-founded Telecom Equipment and Services Export Promotion Council (TEPC).

He suggested that telecom service providers share under-utilised assets like “unused spectrum, cell towers and fibre networks” to bring broadband to rural India, adding, “BharatNet is a good concept and has potential to empower all citizens if implemented correctly.”

Also read: How Trump’s Huawei ban threatens to throttle global 5G rollout

Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it You are reading this because you value good, intelligent and objective journalism. We thank you for your time and your trust. You also know that the news media is facing an unprecedented crisis. It is likely that you are also hearing of the brutal layoffs and pay-cuts hitting the industry. There are many reasons why the media’s economics is broken. But a big one is that good people are not yet paying enough for good journalism. We have a newsroom filled with talented young reporters. We also have the country’s most robust editing and fact-checking team, finest news photographers and video professionals. We are building India’s most ambitious and energetic news platform. And have just turned three. At ThePrint, we invest in quality journalists. We pay them fairly. As you may have noticed, we do not flinch from spending whatever it takes to make sure our reporters reach where the story is. This comes with a sizable cost. For us to continue bringing quality journalism, we need readers like you to pay for it. If you think we deserve your support, do join us in this endeavour to strengthen fair, free, courageous and questioning journalism. Please click on the link below. Your support will define ThePrint’s future. Support Our Journalism

Show Full Article