The government aims to attract $100 billion investment in the telecom sector in 5 years, a target questioned by many given the current financial stress in the sector but the number looks pretty small when compared to China, where telcos have been consistently investing $70 billion annually for the past many years.
Telecom Secretary Aruna Sundararajan too feels that the fundamentals of telecom sector are robust enough to aspire and achieve the objective despite the current slump.
"We did a comparative benchmarking with China, which has consistently spent $70 billion on telecom infrastructure per year for the past many years. We have said $100 billion in five years. In my view, $100 billion is actually a slight underestimation. If we really want to create next-generation infrastructure, India must create a framework where we can have significant investments coming into the sector," she said.
Elaborating on the growth prospects of the telecom sector, the secretary said digitisation has delivered immensely to Indian economy in the very short period. It was estimated that in the last 2-3 years alone, the internet economy has contributed more than a $100 billion.
"Software has taken us almost 20 years to get to a turnover of $150 billion, the telecom sector which is underlying the internet economy has delivered a $100 billion in a much shorter timeframe," she added.
As such, India has touched only 30 per cent broadband penetration, that too on mobile, she said, adding that 70 per cent of the growth still remained to be tapped.
"This 70 per cent growth ahead of us is what makes the Government fairly confident that this is the strongest and most robust growth that the market has seen as far as the digital communication sector is concerned in the medium to long-term. So, the policy specifically mentions that it will seek to address the current levels of stress," she said.
In a bid to prove an enabling environment, the government is working on the new telecom policy, a draft of which has been put for public consultation. The policy aims to achieve $100 billion investments, a creation of 4 million jobs and broadband for every citizen of the country. The government feels that players in this sector need light touch licencing, ease of doing business, easing burden of regulatory compliances, a stable and predictable regulatory environment and a need of a new institutional mechanism.
The government has also conveyed to the state governments that digital infrastructure should be supported. "It needs to be recognised that while every state has been welcoming infrastructure in roads, ports, railways, housing they have adopted a revenue maximisation policy when it comes to telecom infrastructure.