The first edition of the India Mobile Congress, that kicked off on Wednesday in Delhi, turned out to be a showstopper as the two biggest rivals in the telecom industry — Reliance chairman Mukesh Ambani and Bharti chief Sunil Mittal — shared the same stage and spoke in similar language to make Digital India a success story. When Ambani and Mittal referred to each other as “good friend” and bonded on stage, the audience, including government and industry representatives, watched in surprise. Reliance Jio and its “predatory pricing” was kept on the side for a while.
The common theme for which the two industrialists agreed to come to the same platform was their backing of government’s signature campaign Digital India, to connect every citizen of the country. The fierce rivals admitted that to serve the 1.3 billion people of India, who are going to consume and use digital media, everybody has to work together.
Ambani said, “We must break silos and forge partnerships. No corporate, nor the government, can do it alone. Together, we can achieve the unimaginable.”
The views of Ambani found an echo in Mittal’s speech. He accepted that though they compete head-on, companies have to collaborate and share infrastructure. “You have a Prime Minister and a government that is committed to using digital platforms to serve the society, and this combination gives me hope that India will emerge as one of the leading telecom markets on the globe. Clearly, as Mukesh (Ambani) pointed out, one of us can’t do it alone, we all have to come together. While we compete head-on for the benefit of customers, we have to collaborate amongst ourselves, use common towers, common fibre, submarine cables,” Mittal said.
However, Idea Cellular, which is the third-largest operator, raised some pressing issues facing the sector like financial stress and the recent cut in interconnect charges. “While it is important to talk about Vision 2020, it is also important to talk about the big elephant that is in the room and nobody is talking about… the recent market development has affected the dynamics of the industry, with the sector passing through a series of severe financial as well as mental stress,” Idea Cellular Managing Director Himanshu Kapania said.
Talking about the reduction in interconnect usage charges to 6 paise per minute, Kapania said with the drop, the poorest 500 million Indians, who use mobile services in deep rural areas and who have thrived on pure incoming calls with an average monthly spend of only Rs 10 or Rs 20, want the subsidy to be continued by operators, which are not in a position to provide any more subsidy.
“The government has to decide. Does it want only to have forward-looking technology (4G), or it allows coexistence of 2G? Trai has clearly pushed up to a level that only one technology survives. In such a challenging scenario, we need urgent support from the government,” Kapania added.
The Idea Cellular MD emphasised that about 900 million Indians use 2G networks for connectivity and spend Rs 80-100 a month. “These 2G and 3G networks serve as a lifeline for the mass market and rural India. The tepid revenue growth prospects of the industry coupled with the alarming threat of higher NPAs will curtail the industry’s ability to invest,” he said.
However, Ambani, highlighting the importance of newer technologies, said 4G coverage in India would become larger than the 2G coverage within the next 12 months. “All of us have worked to create a robust digital circulatory system to carry data to each one of the 1.3 billion Indians.”
India, Ambani said, has leapfrogged from a lowly 155th position in mobile broadband penetration to being the world’s largest mobile data consuming nation in just one year. He put down this jump largely to the launch of Jio, saying the pace at which the Indian mobile industry has grown is unparallelled in the world. Since its launch, Jio has been locked in a bitter battle with older telecom players led by Airtel.
The older firms have accused Jio of using deep pockets to create a monopoly. “Let’s not forget, India provides a big enough opportunity for all of us to grow and prosper together. The opportunity to pave the path for our nation’s progress and create a better quality of life for every Indian beckons us,” Ambani said.
Mittal said the industry as a whole was investing huge money in infrastructure. “We are putting up a lot of money. My own company would have put in up to September over Rs 10,000 crore in hard infrastructure. This year, the plan is to put up Rs 18,000-20,000 crore of investment. Mukesh is putting up lots of investments and I am sure other companies are doing the same. So overall, Rs 50,000-60,000 crore in just one year is going into building hard digital infrastructure,” Mittal said.
Mobile towers in cantonments
To improve mobile phone connectivity, the Cabinet on Wednesday approved installation of telecom towers in all army cantonments, according to a PTI report. “We have just approved installation of towers in all the army cantonments of the country,” Union Minister Ravi Shankar Prasad said at India Mobile Congress.
Prasad attended the event after attending the Cabinet meeting, headed by Prime Minister Narendra Modi in the morning.