Union Minister of State for Communications with independent charge Manoj Sinha is a civil engineer from the IIT, BHU, Varanasi. A three-time BJP MP in Lok Sabha, he represents Ghazipur. In an interview to The Statesman, Sinha spoke to Anjul Tomar on the focus areas of his ministry ~ relief package for telcos, New Telecom Policy, internet for all, and boosting manufacturing. He said the government will come to the rescue of financially strained telcos. Excerpts:
Your ministry is working on the New Telecom Policy. What are the focus areas of the policy and when is it likely to be announced ? What is there for consumers and telcos?
A. Telecom policy is under formulation and is likely to be announced by March next year. It’ll be a forward looking policy with a vision for future technologies like 5G, Internet Of Things and Artificial Intelligence. A big thrust of the policy would be on providing internet for all and Make in India programme. Another focus will be on manufacturing in telecom sector. And to promote this, incentives would be provided in the new policy. At present, we are importing majority of telecom equipment. The idea is to manufacture them here not just for our own consumption but also for exporting to other countries like Africa and Middle East. Soon we will have a wide consultation with the stakeholders on the various aspects of policy.
A relief package for the debt-laden telecom sector will be implemented soon. What are the problems of the telecom sector?
We had a meeting with the telecom companies on 22 June in which they flagged pressure on profitability and revenue affecting health of the sector. The industry had sought sops to overcome the crisis. The government is trying to play the role of a facilitator for the sector, though nothing can be done retrospectively. The telecom companies are going to get big relief when the recommendations of the Inter-Ministerial Group are implemented.
After Telecom Commission’s decision, the relief package has to be vetted by you and finally by the cabinet. What are the recommendations of the inter-ministerial group?
The group, set up to suggest measures to ease financial stress in the telecom sector, has recommended extension of deferred payment schedule from 10 to 16 years. Currently, the companies have to pay a portion of the spectrum auction amount upfront. The remaining has to be paid every year in 10 installments after a two-year moratorium. The panel has also recommended migration from Prime Lending Rate (PLR) to Marginal Cost of Funds-based Lending Rate (MCLR) for interest payments. However, on easing spectrum cap rules, the panel has suggested holding consultations with TRAI.
By when do you expect the sector to stabilise and return to revenue growth?
The sector is likely to settle down over one year. There is some churn whenever a new player enters the market. It has also happened in the past. But eventually the market settles down. The government can also go for policy changes if the sector doesn’t shows signs of recovery.
Will consolidation lead to a hike in tariffs?
Most developed nations have 2-3 players. We will have four to five players. Consolidation will leave in the race Bharti Airtel, Reliance Jio, Voda-Idea and RCom-Aircel combine. Then, there are BSNL and MTNL. In such scenario, I don’t see tariffs getting impacted.
BharatNet project, which seeks to provide broadband connectivity to all the villages, seems to have missed three deadlines. When is it likely to happen?
When I took charge of the ministry, not a single panchayat was connected with broadband. But now BharatNet project is progressing well. We have connected 32,623 gram pachayats with internet by laying 2.25 km of optical fibre. By November end, a total of 1 lakh gram panchayats will be connected. We hope to complete the project by March 2019.
When will the auction of 700 MHz be held?
We’ve asked TRAI for reserve price and have also sought its recommendations in various other spectrum bands. The government will take a decision on the timing and issues regarding holding auction after getting recommendations from the regulator.
Telecom giants are now looking forward to the next big thing-5G technology. What’s the update on it?
International Telecommunications Union (ITU) is yet to formulate standards of 5G technologies. India will get 5G with the rest of the world.
Telecom industry has sought level-playing field between telcos and over-the-top players like WhatsApp. Is the new policy likely to take care of this?
TRAI’s recommendations are awaited on the issue. We will decide on it after getting their recommendations and considering all the facts and circumstances.
What is the impact of GST on telecom services?
We are analysing the impact of GST on the sector. The new tax rate for telecom services is 18 per cent which is higher than 15 per cent being paid by consumers on phone bills. Our understanding has been that the input credit would bring the effective rate down to around 16 per cent. However, the companies are saying that they are getting input credit of only 1.21 per cent as against expected 1.86 per cent. We are looking into it. It should have no impact on consumers.
Call drop rates have reduced by 8 per cent. Will it fall further?
The call drop rate has come down by 8 per cent. There is substantial improvement in customer satisfaction too. We are looking to further reduce the call drop rates by the end of this year. From 1 October, the telecom operators not meeting the norms regarding call drops will have to pay penalty. This will also act as a deterrent.
Do you see any improvement in the financial positions of BSNL and MTNL?
One thing is clear that BSNL-MTNL merger can’t happen. There is no proposal in this regard. The government is working on improving the financial health of the two companies. We are seriously thinking about revival of MTNL. A consulting firm has submitted its report on restructuring and revival of debt-laden MTNL. BSNL is investing in network and expanding services. Its market share has also increased.