It’s important to get pricing right for 5G: Rajan Mathews

After a decade-long stint with the Cellular Operators Association of India (COAI), Rajan S Mathews, who served as its Director-General since 2010, has stepped down. A veteran of more than 40 years, Mathews has worked with global majors such as Telargo, Afghan Wireless Communications and AT&T Wireless, among others, before joining COAI.

During his tenure, the operators’ body emerged as a facilitator to the government on regulations, rather than being purely adversarial and worked closely with the Department of Telecommunications and the Telecom Regulatory Authority of India (TRAI) on issues such as spectrum pricing, Mobile Number Portability (MNP) roll-out and rural connectivity, among others.

In an interview to BusinessLine , Mathews, who is now heading to Boston to be with this family and would be involved with NGO activities, talks about the past decade and the way forward for the telecom sector. Edited excerpts:

Overall it was a very satisfying journey. When I was recruited for this post, I understood that we would be doing things on mobile networks that no other country was doing.

The biggest challenge over the past 10 years was maintaining unity among the multiple interests of various members. Earlier, there were differences in interests between new operators and incumbents, ranging from interconnect usage charges and spectrum policies, among others.

Reliance Jio Infocomm (RJio) joining COAI was another point of friction, while bringing in Google, Facebook and Amazon as associate members and ensuring their interests were also represented were the other challenges.

That was before I joined. After I came, the then head of Auspi (SC Khanna) and I worked closely on initiatives such as reducing carbon footprint, how to go green and MNP, among others.

I’m not as pessimistic. I had the privilege of being one of the first CEOs of Idea, then Birla AT&T. So, I think it would be a sad day if Vodafone Idea were to exit. But for a robust competitive environment, we must have at least three private operators and I think that the government has to do something to revive the sector.

At the last count about ₹50,000 crore was lying unutilised with USOF. In terms of priority, this must be used for fibrisation, covering uncovered areas and giving subsidies to provide coverage. Further, the levy for USOF should be reduced to two per cent from five per cent. This would leave a lot more money with private operators that could be used to expand coverage.

With now many operators shutting down, there is a lot of spectrum out there, which can be used if the government clarifies on sharing and trading issues. The spectrum used by firms such as Tata Tele, Aircel and Reliance Communications are all available now.

Secondly, additional 4G spectrum must be given to operators. On 5G spectrum, the important issue is to get the pricing right so that the industry is not pushed back into a debt situation as in the previous auctions.

Unless the overhang and uncertainties in the matter are settled, companies would find it difficult to raise sizeable investments. So, it is in everybody’s interest to settle the matter expeditiously. And once the court has made its decision, it is for the government to then change policies and licensing norms to help companies deal with the ruling. That is, if the court imposes heavy penalties and charges, then the government must reduce the taxes and levies.

RJio is coming up with indigenous 5G, and such initiatives must be encouraged for the country to be self-reliant. Further, we must invest in the development of Intellectual Property Rights (IPR), incentivise IPR and provide benefits, such as tax sops, to companies making investments in R&D. Without R&D, we are not going to be self-reliant. We must then be able to compete globally, not just domestically, especially when we start looking at developing 5G technology.

The VRS was absolutely essential. The success of every company always depends on good management, and we need to make sure that the appropriate management structure is put in place with minimal interference from the government.

Then, the procurement policies of the PSUs must be upgraded to allow them to be able to compete against private operators. So, a good management, good procurement policies and appropriate investments are needed.

There has been a fundamental switch in the pattern of traffic due to Work From Home, migration of people back to rural areas and heavy video usage. These have put an inordinate amount of load on telecom networks.

It takes about 9-12 months to put in infrastructure. However, the challenges of getting timely clearance and Right of Way (RoW) approvals from various State and local municipalities have prevented operators from increasing network capacity by adding new towers and fibre.

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