India’s telecom industry is passing
through a very difficult phase, just like a directionless ship in a
stormy sea. Presently, almost every person in the country owns a mobile
phone. If the government does not enforce rules strictly and a
well-thought mechanism is not put in place, the country will face
digital tsunami in the days to come. There are many reasons for this
apprehension and only a few are mentioned in this article for the
interest of telecom users.
Firstly, on October 1, 2000, the then NDA
government created Bharat Sanchar Nigam Limited (BSNL) as a Central PSU
by carving out telecom operations from the Department of
Telecommunications (DOT) in the spirit of 1999 Telecom Policy and
thereby about 3 lakh DOT employees were absorbed in the new entity. The
main aim was to allow private telecom operators, to develop a
competitive atmosphere in a level playing field and thereby create
telecom revolution in the country. But right from the beginning, the
government was inclined towards private operators and during the first
four years, BSNL was not even allowed to provide mobile services. This
gave an opportunity to private operators, especially Reliance
Communications, to earn huge profits by providing services at exorbitant
rates to the tune of Rs 15 to Rs 20 per minute for outgoing calls and
even Rs 5 to Rs 8 per minute against incoming calls. After that BSNL was
allowed to offer mobile service and the rates came down drastically to
the minimum with incoming calls becoming completely free. Since then
both UPA and NDA governments did everything possible and tied the hands
of BSNL to make the PSU weaker day by day.
Today the telecom tariffs in India are
the lowest compared to any country in the globe. This has become
possible only because of the presence of BSNL and MTNL (the latter
operates in Delhi and Mumbai only) which work for the nation and not for
earning profits. If these Central PSUs are shut down, the tariffs will
shoot up to not less than ten times of today’s tariffs. A person
spending only Rs 150 per month for both voice and internet data services
will have to pay out at least Rs 1,500 for the same period and as a
result 50 percent of the total 120 crore mobile subscribers will be
forced to either quit or to satisfy themselves with voice calls only.
This will have a negative impact on Digital India programme too.
Secondly, the rate race in the telecom
industry is going to take its toll on the banking sector also. Reserve
Bank of India had earlier fixed a cap of Rs 5 lakh crore as loan for the
telecom sector and this limit was maintained till the entry of Reliance
Jio in the market in 2016. After its big bang launch using the
photograph of none other than the Hon’ble Prime Minister on front page
of every newspaper throughout the country on September 5, 2016, and only
in order to extend bank loan to Reliance Jio, this cap on upper limit
was violated. Moreover, after getting a huge bank loan of Rs 1 lakh 12
thousand crore, Reliance Jio created an unprecedented situation in the
telecom sector. The company started giving service free of cost beyond
promotional period at its whim and fancy, violating all rules of fair
competition and then continued to provide services through predatory
pricing (it is a price less than the production cost of a particular
service) and both the Telecom Regulatory Authority of India (TRAI) and
the government remained mute spectators. It is relevant to mention here
that the new entrant was not providing services at rock bottom rates
just to serve the nation, but its sole aim was to kill all competitors
and then enjoy monopoly in the sector to loot the public in the long
run.
The result was clearly visible. There
were more than a dozen telecom operators at the time of entry of
Reliance Jio in 2016. But due to such illegal operation of Reliance
Jio, the number of operators came down to four. Vodafone India and Idea
Cellular could not stand alone and merged to form Vodafone Idea Ltd in
2018. Videocon sold its spectrum and left the market in 2016, MTS India
got sold to Anil Ambani’s Reliance Communication in 2017, Telenor India
and Tata Docomo closed their independent shops and merged with Bharati
Airtel in 2018 and 2019 respectively. Aircel and Reliance Communication
were unable to run their business and pay back bank loans and had to go
bankrupt. Till date, the bank loan (excluding interest) against Vodafone
Idea Ltd is Rs 1 lakh 18 thousand crore, loan of Bharati Airtel is Rs 1
lakh 8 thousand crore, against Reliance Jio it is Rs 1 lakh 12 thousand
crore and the loan against BSNL is only Rs 20 thousand crore. Although
there is huge demand for telecom services in the country, all the four
operators are incurring losses to the tune of several thousand crore
rupees each. Now the bigger question is whether the banks will be able
to recover the total loans to the tune of more than Rs 6 lakh crore from
the existing private operators which are running at huge losses or from
those who have already left the market. What is going to be its impact
on country’s economy?
Thirdly, in addition to the use of
telecom facilities at individual levels, it is now inevitable in general
administration, national security, business, banking, education,
disaster management, space research, space missions etc. Therefore, it
is necessary that the government has one organization of its own to
ensure data security for all such operations and financial transactions.
Without data security, there will be utter chaos at every step. But
unfortunately BSNL has been experiencing step-motherly attitude from the
government right from its birth. Not to speak of financial support, the
government is not allotting 4G spectrum to its own company and even
siphoning out huge amount from BSNL in the name of pension contribution
violating the existing norms. Readers will be surprised to know that
BSNL executives are spending money from their pockets to tide over the
financial crisis and maintain services. We all know that BSNL owns land
having value of Rs 3 lakh crore, 66 thousand mobile towers, 8 lakh kms
optical fibre network, running 17,000 loss making rural exchanges just
for supporting Digital India programme, 3,000 kms of digital microwave
network, more than 100 satellite earth stations etc. With such a huge
public asset and well trained technical manpower, BSNL is
self-sufficient to face any challenge. But the government is yet to take
a bold decision to ensure that its own company survives with full
strength for the interest of the nation. On October 3 last, the
government has taken a short term measure including Voluntary Retirement
Scheme (VRS) to revive BSNL and the same is expected to be approved by
the Cabinet before Deepawali. The government should take all necessary
steps before it is too late to run BSNL with full strength. This is the
need of the hour.