India Mobile Congress: Mittal sees challenges, Ambani opportunities

(From left) RIL Chairman Mukesh Ambani, Aditya Birla Group Chairman Kumar Mangalam Birla, and Bharti Enterprises Chairman Sunil Bharti Mittal during the India Mobile Congress 2018 in New Delhi | Photo: PTI
The radical change the telecom industry has gone over the past two years and its resulting sentiment were visible at the second edition of the India Mobile Congress.

While Bharti Airtel Chairman Sunil Mittal rued about high taxes and spectrum charges on the sector, Mukesh Ambani, who led a telecom revolution through Reliance Jio, talked about connecting everybody in the country at most affordable rates.

Ambani did not mention the taxation and levies. Rather, he stressed how India would be a fully-4G country and ready for 5G ahead of others.

Speaking during the inaugural session, Mittal said though consolidation was a reality in India, it had not happened in an orderly fashion. “Other than the Vodafone-Idea merger, many operators have to go through significant pain, job losses have happened, over $50 billion has been written off... but we have finally arrived at a point where we are in a right industry structure,” Mittal said.

The structure of the telecom industry has changed since Reliance Jio entered the market in September 2016. Many operators have been forced to shut shop or merge with other entities. Bharti Airtel has acquired Telenor and Tata Teleservices whereas Jio has taken the assets of Reliance Communications as the firm stopped offering wireless services. Another operator, Aircel, has gone for bankruptcy.

“The consolidation part is settled now…we don’t need to have too many operators, especially in a capital-heavy industry, so I am very glad that India has reached the point in a fairly swift manner,” Mittal said.

He said in India mobile operators paid Rs 37 as levies for every Rs 100 they earned.

Mittal he could not see how this contradiction could stay when, on the one hand, there was the Prime Minister’s vision of a digitally enabled India, which required tremendous amounts of investment, and, on the other hand, the spectrum prices and charges were kept very high. The goods and services rate on telecom, at 18 per cent, is just one notch short of the highest tax bracket. “We cannot have these two competing positions in the industry ... this needs to be resolved,” Mittal added.

Vodafone-Idea Chairman Kumar Mangalam Birla said India was on the verge of becoming a digital economy and the company was committed to making ‘Digital India’ a reality.

Balesh Sharma, chief executive officer of newly created Vodafone-Idea Ltd, too complained about high taxes and low tariffs. He said the telecom industry was bleeding and, at some stage, this had to change. Asked about tariffs and if they were sustainable in launching services, he said the tariffs were unaffordable and new services could not be launched. He, however, said the company would keep competing.

The narrative of Ambani was in contrast to that of Mittal. The chairman and managing director of Reliance Industries said India had moved from 155th rank in mobile broadband penetration to number one position in mobile data consumption in the world in less than two years. “This is the fastest transition anywhere in the world from 2G/3G to 4G. By 2020, I believe that India will be a fully-4G country and ready for 5G ahead of others…At Jio, we are committed to connecting everyone and everything, everywhere, always with the highest quality and the most affordable price,” Ambani said. After revolutionising the mobile broadband sector, Ambani has not set his sights on fixed broadband through JioGigaFiber. Ambani said Jio was committed to building a deep-fibre network across the country and ensuring that every premise was connected with the highest quality network. “I believe India will rise from a lowly 135th rank to be among the top three nations in fixed broadband at a pace that will surprise the world. And from day one, JioGigaFiber will offer complete fixed-mobile convergence ...,” Ambani added.

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