And to survive, a floor price is needed quickly, before March 2020, he told PTI.
With 1 gigabyte (GB) of mobile data costing just $0.26 compared to $12.37 in the US and $6.66 in the UK, India in 2019 emerged as the nation with the cheapest telecom tariff in the world. It was also the fastest-growing telecom market.
But below the surface, a price war since the 2016 launch of Jio had ringed the sector hallow. And when on October 24, the Supreme Court, on a petition moved by the government, ordered payment of past dues according to its new definition of AGR, the country's second-biggest carrier Vodafone-Idea Ltd warned of shut down if no relief is given.
The total dues for the industry ran into a whopping Rs 1.47 lakh crore.
For an industry that has come from 7-8 operators to just three private players and state-owned fourth operator, the warning by Vodafone-Idea sounded like a death knell.
The year saw resurfacing of a bitter war of words between the old and the new operator, and intense lobbying by telecom czar Sunil Bharti Mittal and billionaire Kumar Mangalam Birla of Vodafone-Idea.
Mittal and Birla had faced the brunt of brute competition unleashed by Ambani, as Jio ate into their user base and quickly grew to become the nation's biggest operator in terms of subscribers.
Airtel and Voda-Idea reported record financial losses but Jio continued to surprise the markets with astonishing profits through the year.
The representations to the government, worked. The government announced a two-year deferment on spectrum payments for the stressed telecom companies as it worked to avoid the sector becoming a monopoly, soon after the three operators signalled the end of price war by raising tariffs.
Mittal lobbied for regulator prescribing for a floor tariff for industry viability - an idea Jio had initially opposed on grounds that it would tantamount of giving up industry right of forbearance, Telecom Regulatory Authority of India (Trai) quickly moved in to float consultation paper to fixing minimum rates.
COAI - the association that represents Airtel and other operators - wants the regulator to bring floor prices for data at the earliest, before March, arguing that mature mobile market merits such safeguards for investors.
And shocking loss numbers only led the telecom industry to seek doing away with the "obsolete mechanism" of AGR, in the best-case scenario, and if not, certainly a redefinition.
The industry is also pinning its hopes on fixation of floor price by the regulator to put an end to the sustained hemorrhaging of players and has also urged the Finance Ministry to substantially cut levies to give the industry a fighting chance.
The industry body remains optimistic that a recent increase in tariffs won't take the sheen off data consumption; the hunger for data will increase as more and more Indians transact online, buy clothes and indulge in online shopping and simply binge-watch the latest shows on video-streaming platforms. Greater speeds, smarter phones would aid that process, it argues.
"Still, the floor price is certainly needed to bring certain discipline back into the marketplace. We have fundamentally gone from an all voice network to a hybrid network, to soon an all data network. In a voice network, the de facto floor was the interconnect charge, question is, in the new world of data what should it be," Mathews said.
Mittal whose company is in the midst of $3 billion dollar fund raising to help pay off AGR dues, has sought Trai's urgent intervention in the telecom sector saying, "We are unnecessarily killing this industry in a manner and way that is not conducive..."
He underlined the need for a balance between protecting investments and consumer interest.
Airtel posted a staggering Rs 23,045 crore net loss for the second quarter ended September 30, due to provisioning of Rs 28,450 crore in the aftermath of the SC ruling on statutory dues.
Both Airtel and Vodafone Idea have petitioned the government for relief in waiver of interest and penalty, which will halve the dues, and also filed a review petition in the Supreme Court.
The year, however, brought cheer to state-owned telecom companies MTNL and BSNL. The government recently approved a plum Rs 69,000 crore revival package for the two telcos that were in news over delay in salary payment for the most part of the year.
The revival package includes merging the two loss-making firms, monetizing their assets and giving VRS to employees so that the combined entity turns profitable in two years.
Nearly 92,700 employees of BSNL and MTNL have opted for voluntary retirement, which is expected to save about Rs 8,800 crore annually in salary bills for the debt-laden telecom companies.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.