Sunil Bharti Mittal Talks About the Telecom Industry

Sunil Bharti Mittal Talks About the Telecom Industry

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Sunil Bharti Mittal is the chairman of global telecom body GSMA in addition to being the chairman of India’s largest telco, Bharti Airtel. In an interview,he told ET that his strategy for improving the financial health and credibility of the industry worldwide rests on four pillars — deepening active sharing by pooling spectrum in a separate company run by a third party; more consolidation; a change in the attitude of governments towards telecom; and abolishing roaming charges while improving transparency in billing. Here are some edited excerpts: 

Would that ensure enough competition in the market? Enough for consumers?
Here, you are talking about giving 1GB a day, not 1GB a month. The paradigm has shifted. At Rs 303 a month, plus some Rs99 for a year, India would have the lowest tariffs in the world. And finally, regulators already have the powers to intervene. But you can’t have an impaired industry but also have the vision of a Digital India.

What are the 2-3 policy prescriptions that you would want from the telecom department or the regulator?
There’s a new operator in town. Everyone is trying to hold onto their market share. At the moment, there are pressure on tarriffs. What can the regulator do? One, encourage consolidation. It appears from secretary telecom’s comments that they are clear that’s the right way to go. Clearances for the mergers should come out expeditiously.

Second part is spectrum pricing, which in India has gone out of control. Whatever has been paid in the last few auctions is not sustainable to give low value proposition to the customers. Finally, telecom has to be a means to an end, it can’t be an end in itself. If you want to pick up a lot of money upfront, then you will compromise on investments in networks. A report on spectrum pricing by GSMA shows that wherever in a country companies have paid more money for spectrum, has resulted in lower investments in networks.

How can government reduce spectrum pricing, given so much policing by CVC, etc?
They (government) will have to reduce it otherise every time they auction, spectrum will go unsold. When you have four operators plus BSNL, who’s going to buy expensive spectrum. There’s no capacity to buy expensive spectrum. So, forces in the government don’t allow them to take prices lower, but don’t forget, in the earlier auctions, the prices of 800 Mhz and 1800 Mhz were lowered when they went unsold. There is a precedence.

Would you like to see spectrum auctions this year?
It won’t happen. There’s enough spectrum that has been tanked up by us atleast. Vodafone-Idea merger will yield a lot of spectrum for them. Jio has picked up the spectrum they wanted. They may want a little bit here or there, so who’s the buyer.

Right now, there’s no need for spectrum. We have moved to spectrum surplus for the moment, but eventually, when the data consumption goes up, we will again need more spectrum. There can’t be any auctions in 2017-18.

Are you disappointed at the fact that nothing has been done to check the industry’s bleeding, and the regulator’s role in it?
This time, we went straight to the authorities – the Trai, who cleared the offers, and now we are at TDSAT. Can’t comment on TDSAT proceedings. I was happy to see that the Telecom Commission has also taken note that the revenue of the government is falling, because in the end, every Rs 100 that the industry gets on the topline, nearly Rs 40 belongs to the government.

By when do think industry will stabilise?
I would say watch out for March 2018. It takes about a year for the dust to settle down. 25% of the market belongs to the small operators. When you have the share to be divided in 3 big players, and then BSNL and maybe one more combination, you will have 85%, if not 90%, between the three operators.

If the Indian market is going to grow from Rs2 lakh crores a year to Rs4 lakh crores, because data consumption is going up, IoT (Internet of Things) coming, Jio has hooked a lot of people into video, people will be willing to spend a lot more money. So, if you can take this to Rs4 lakh crore, and you are dividing the pool in a 3-4 player market, I think the economics will start to work well, despite the fact that tarriffs will remain low.

Is there any case for a financial package for the industry?
I don’t think so. In the end you have to take business decisions and take the associated risks. Some places you go right, some wrong. I don’t think the industry is at a point where any of the crisis industry packages are required.

What do you think will be India’s plans around 5G?
Experiments have started. Before you take a breather from a 3G or a 4G, 5G lands up. I thought 5G will knock in in 2020-2021, but it looks like 2019 now, where you will start seeing some network rollouts (globally), including handset availability. 2020 you will see a lot of action.

In India, my view is application of 5G is more in IoT. And the IoT part needs to develop much more in India. It is still slightly behind.

 

Go here, for the full interview.

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