RJio’s Entry Brings More To The Sector

The Department of Telecommunications believes in Prime Minister Narendra Modi’s vision of improving the ease of doing business. For the department, this means one major reform per month. Telecom secretary J. S. Deepak, in an exclusive conversation with BW Businessworld’s Suman K. Jha, opens up on various issues related to the upcoming spectrum auctions and Reliance Jio’s entry in the market. Excerpts:

The upcoming spectrum auctions take place at a time when rock-bottom tariffs have been introduced in the market. There’s a feeling that major players may be conservative in the auctions. Does that worry you?
If you look at the sector as a whole, it is propelled by two things — one is private enterprise, risk taking and investments, and, second is competition. This (Reliance Jio) entry would add to both competition and private investments, so in that sense, it should help the sector.

It is also feared that an expensive auction would push the sector further in a debt trap…
The auction is about putting out a lot of spectrum in the hand of operators, both in volume, as well as in variety. The defining feature of this auction is not so much about the price you talk of, but about the fact that any operator can choose and buy the spectrum missing in his bouquet to improve the quality of their services. It has been a continuous complaint of the industry that it is starved of spectrum and therefore, is not able to provide quality service. After this auction, this complaint should be a thing of the past, and spectrum scarcity of fragmentation being an impediment in providing quality services would no longer exist in India.

Are you confident of your expected figures?
I don’t know what you mean by expected figures. Every auction has some spectrum put out for sale. All of it is not expected to be sold. There is unsold spectrum too. So, I expect unsold spectrum in this auction also, but there is a lot of spectrum for which there is robust demand.

It’s feared that the entry of Reliance Jio (RJio) will push the players in the 6th and 7th position out of business. Will you help in ensuring a level-playing field?
We have in the past, in present. We will also in the future, continue to provide a level-playing field. This is the reason the sector is so vibrant. At the same time, consolidation is also part of the rules of the game. We have guidelines for mergers and acquisitions, for spectrum trading, and spectrum sharing. All of these are forward-looking measures. Earlier, there were problems in the entry and exit. Now, that is not the case.

Why is there such an unprecedented upheaval with the entry of RJio — with petitions and counter-petitions, and industry leaders queuing up to meet you and requesting your intervention?
You overstate the point. When Promise toothpaste made an entry while Colgate was the market leader, there was a huge upheaval in the market. Such things are seen when a new player enters the market. RJio is a major player in terms of investments it has made, and the network it has created. There’s an upheaval as you describe it. But that was expected. But ultimately if the consumer benefits, and the sector is not disrupted in the sense that provisions of services do not become difficult and there is competition, it will be good for the sector.

With the latest offering consumer expectations are sky high. How will you ensure that their expectations are met, although there is some improvement in the call drop issue in cities such as New Delhi?
Consumers in cities like Delhi and some parts of Mumbai and other parts of the country were dissatisfied with the quality of calls because the quality of services was less than acceptable. We have tried to look at the various causes. There were many reasons for call drops. One of the reasons is certainly that there needs to be more investment in infrastructure. We worked with the industry and tried to set goals for them. Creation of infrastructure in dark spots was emphasised. The call drop problem is less than what it used to be, but it is still work in progress. We are trying to see where government intervention can be effective. The private industry should also realise its responsibility.

During the recent RJio entry, a number of fundamental issues were raised. For instance, it was asked whether new entrants can carry out trials by targeting a humongous base like RJio did. What are your thoughts on this?
This was a new situation. There are certain grey areas on what a test period is, and what number of consumers can be targeted. Now that RJio test period is over, we have requested Trai to define the test period, and what various parameters should be. As a regulator, it is their job to look at recommendations, we will look at that formulate new test procedures, if required.

With telecom wars becoming unpleasant, industry leaders queued up to meet you, requesting your intervention. Is there a room for your intervention here?
If the industry has an issue, it’s part of my job to understand what the issue is, and to address it at the earliest. We also keep in mind that public interest and government revenues are protected. At the same time, a level-playing field is maintained across the sector so competition can thrive.

RJio’s entry means more competition in the sector — would you say that is the bottomline?
I look at it as more competition, more innovation, more investments, more choice for consumers.

What are the long-term telecom reforms you are looking at?
The government is focussed on improving the ease of doing business. The telecom sector is 90 per cent private. The government has a critical role, and our business is to facilitate and make life simpler for the industry. We are working keeping in mind the PM’s vision. For the telecom sector we are trying to translate this vision into one major reform every month. And three or four major reforms have happened in the last six to eight months.

The first is harmonisation of spectrum. This has never been done before. We put defence spectrum, spectrum holdings of each player together, so that they have larger chunks, more efficient propagation and better services.

The second thing is, India didn’t have a reseller licence. Telecom service provider was one which marketed the services. We have come out with a virtual network operator licence in May which has separated the telecom networks from the service provisions.

So, there’s lot of scope for innovation in the sense that there could be franchisees, players, who buy bulk data and voice, and sell it after branding for niche segments and specific users.

The third is e-KYC. Telecom sector has about 80 to 100 million new customers every year. Each one has to fill up a form, it’s verified and then the connection is authorised. With the help of e-KYC, a customer can go to a sale point, identify himself with his biometrics, certify the information is correct and he can be given a sim card right away. Reams of paper records are not required to be stored, and all records are maintained electronically.

The fourth thing is we are planning to bring more transparency and certainty in the way the government and its agencies including municipalities and local bodies treat applications for setting up infrastructure, including fibre and tower. The idea is anyone applying for permissions should know how it will be processed.

suman@businessworld.in;
@skjsumankjha