Following are
the important happenings/trends in the Indian Telecom Sector during 2011. The
source for this information is the annexure
to the Letter dated 14th
November 2011 written by Sri Rajiv Chandrasekhar Member Rajyasabha to the Prime
Minister, with certain modifications:
a)
Mobile tariffs have gone up to the extent of 20%
b) The increase in teledensity slowed down-between
November 2009 to August 2010, approximately 18.2 crore subscribers were added
where as during November 2010 to August 2011 only 15.9 crores were added—a decline
of 12.6%
c)
Massive market failures-new entrants failed to
keep prices in check or improve the quality of services. On the other hand they
caused loss to the exchequer(2G scam) and hoarded the spectrum-95% of the
market is held by the old operators.
d) Rollout of telecom networks slowed down
substantially. The net subscriber additions fell down and during July-August
2011 the additions were a mere 66 lakhs and 73 lakhs-the lowest in nearly 4
years.
e) Rural teledensity increased at a slower than
expected rate-based on VLR data(actual number of subscribers utilising the services),
the rural teledensity is merely 22% or approximately 20 crores out of the 70
crore rural population. This means over 50 crores of the rural population still
do not have a mobile phone. TRAI recognized this failure in its recommendations
of 3rd November 2011.
f)
Broadband failure continues to be abysmal—during September
2010 to August 2011, the increase in broadband subscribers was from 10.29
million to 12.69 million—a mere 23% growth, far below the targeted growth.
g)
DND(Do Not Disturb) failed to deter pesky sms/unsolicited
commercial calls
h)
MNP largely ineffective—neither lowered the
tariffs nor improved the quality of service. On the other hand tariff was
increased by 20%.
i)
Government failed to implement the recommendation
of collecting an additional income of Rs 10000 crores from the existing telecom
operators for the additional spectrum held by them beyond the contracted
amount, even though the TRAI gave the recommendation for collecting the amount,
vide its recommendations dated 8-2-2011.
j)
As per the COAI-PWC report(Cellular Operators
Association of India and the consultancy house PriceWaterCooperrs), there will
be a decline of FDI(Foreign Direct Investment) in telecom sector in India from
2.6 bullion US dollars in 2010 to 1.7 billion US dollars in 2011, a decline of
35%.
k)
The viability of telecom industry has
deteriorated as per the COAI-PWC report. There is a decline in average revenue
per minute, minutes of usage, and ARPU(average revenue per user). Sector
revenues were stagnating after adjusting for inflation. Operating and network
expenses were up in most cases. Indebtedness remains high, net profit margins
are down, and returns on capital employed is dangerously low—all these
parameters further deteriorated in 2011.
l)
Not a single license has been cancelled by the
Government although thee TRAI recommended on 18-11-02010 for cancellation of
about 70 licenses due to the failure of the concerned operators in rolling out
their networks as per the license conditions.
m)
Not a single license has been cancelled during
2011 following the CAG’s report that 85 licenses involved fraudulent accessing
of spectrum(2G spectrum scam)
n)
Proposed NTP 2011-only the draft was released in
2011, but not finalized in 2011.
o)
Government failed to implement TRAI’s
recommendations on spectrum, Mergers and Acquisitions and licensing, which have
been pending since 18 months
p)
Failed to clearly decide the quantity of the
contracted spectrum for the licenses given to the operators-whether it was 4.4 MHz or 6.2 MHz
q)
Further decline in the market share of BSNL and
MTNL, in the mobile telephony sector, from 12.13% in August 2010 to 11.66% in
August 2011(both together)
r)
No corrective action worthwhile taken to secure
the network for preventing the leakage of top secret information
s)
Officials guilty of malpractice identified in the
justice Shivraj Committee report on 2G spectrum allocation –no action taken
against them
t)
The contention of the MoCIT(Minister for
Communications&IT) that there was no loss on account of 2G spectrum scam
was rejected outrightly by political parties,media and citizens as well as by
the Hon’ble judge of the special CBI court on 2G scam.
u)
The Government’s contention that Swan/Unitech
transactions with Etisalaat and Uninor represent equity infusion and not windfall
gains and not a loss to the exchequer was rejected. The CBI Special Judge,
while framing charges on 22nd October 2011 concluded that”the two
companies obtained wrongful pecuniary advantage to the extent of Rs 7105 crores
and in furtherance to the said conspiracy and in consideration of grant of UAS
license.”
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