Indian telecom industry is right now facing one of the most severe financial stress, ever encountered. And Jio is just one of the reasons.
Rapidly shifting technological landscape, slipping per GB data charge, oncoming GST regime, rising subscribers, but shrinking revenues – Every telecom player is going through some sort of crisis right now, and they need some quick answers.
Considering all these factors, all telecom operators huddled together and met Telecom Regulatory Authority of India (TRAI) for discussing the ongoing financial mess, and for finding out the way out.
Here are the things that each of the telecom operators discussed:
Contents
Airtel
Airtel was being represented by Gopal Vittal and Ravi Gandhi during the meeting.
One of the biggest and most crucial points which they raised was GST. As per Airtel, GST should be capped at 12% for all telecom operators, which will help them to maintain their cash flow.
Besides, Airtel also asked to raise the existing IUC (Interconnect Charges), so that some sort of standard is set in the industry. In the past, Airtel and Jio had fought several bitter battles related to IUC.
Airtel also shared that dispute redressal mechanism should be improved, and rulings related to mergers and acquisitions should be speedy, and instant.
Lastly, Airtel countered that they have a right to protect the interests of their customers.
Reliance Jio
Meanwhile, Jio countered that license fee for spectrum should also be included in the GST regime so that more transparency can be induced in the whole process of spectrum allocation. This will also help the Govt. to generate more revenues.
Jio, which was represented by Sanjay Mashruwala and Anshuman Thakur, countered that telecom industry requires massive investments, hence operators should be allowed to bring in equity in order to manage the investments.
Regarding IUC charges, Jio proposed that it is a form of a subsidy, which is provided to existing operator, and it should move back to BAK regime. In fact, as per Jio, there should be no cost for providing voice services.
This demand perfectly matches with their free voice offer, which is still on.
Jio countered that financial stress in the industry is being talked about these days because India’s top three telecom companies are facing losses (read Airtel, Vodafone and Idea)
Lastly, Jio said that taxation in India is highest in the world, and it should be reduced.
Vodafone
Vodafone too argued that license fee should be included in the GST regime, besides declaring that spectrum auction process in India is flawed and needs some major changes.
Idea
Idea proposed that there should be a floor price for all voice and data services, for all telecom operators. If this is implemented, then Jio’s free voice offers can end, and in future, no telecom player would be able to offer free services.
The meeting was also attended by representatives of MTS, Tata Telecom, Aircel, BSNL and MTNL.
TRAI Observations
At the end of the meeting, TRAI Chairman, who was presiding the meeting, made four observations:
a) In the first week of July, there would be a workshop on IUC, to discuss all issues.
b) Floor pricing (minimum price for voice and data), is a new concept and needs more discussion.
c) Fundamentals of both of these concepts are new, and every telecom operator should submit their inputs for the same.
d) Ease of Doing Business suggestions for telecom operators are currently under consideration.
So what do you think – Do let us know where are telecom Industry is heading in the comments section below!