Sunil Mittal on the importance of spectrum, reducing tax levels, coming of 5G...

S Ronendra Singh Barcelona | Updated on March 01, 2018

Nothing can be worse than free service: Airtel chief

In the ongoing spat between incumbent players and Reliance Jio on the latest tariff order from TRAI, there is no option but to go to court, said Sunil Bharti Mittal, Chairman of Bharti Airtel.

Mittal, who is also the Chairman of GSMA, told BusinessLine on the sidelines of the Mobile World Congress here that he cannot envisage anything other than a legal challenge to counter the TRAI order. Nothing, he said, can be worse than free services. Excerpts:

How do you think 5G technology is panning out? Do you think we are ready?

Back in time, LTE was exactly at the stage where 5G is today. People started to talk about LTE, but the fact is that LTE is done and dusted now. People are enjoying massive capacities. The world has dramatically altered: LTE/4G is now going to be the biggest use case for the mobile industry. I would say 5G is in exactly the same space, except that the cycle will be shorter then it was for LTE.

It is not going to take 6-7-8 years like before…industrial use cases are coming up like machine-to-machine, and so on. Mobile networks, I would say, are still a bit away, but it will happen. So, 5G will be a game-changer principally for two reasons: the hyper capacity that it gives, and the ultra-low latency. These two things will make a difference because even with LTE/4G you could not do mission critical applications like autonomous cars, robotic surgery, but with 5G, that will become a possibility.

But is India farther away from 5G as compared to the rest of the world?

India is in step more or less. There were times when we would wait for 4-5 years for new technology and, more importantly, prices to drop for this technology (devices/kit). In 3G, we were almost side by side. In 4G, we were at par. There are many parts of the world where they still haven’t launched 4G. India is fully 4G-enabled now.

I would say that on 5G, India would be in step. The issue in the past has been to make simultaneous investment in all the networks at the same time. Now, that will not happen. Now, 4G is almost done; by the end of this year or certainly by the end of next year, India will have all BTSs with 4G. And, we spent $3-4 billion on capex, and instead of on 4G, that will now happen on 5G.

Besides, large parts of the network are so common. Fibres, for example: it is one of the most important components for 5G, for backhaul. We are building for 4G, and we will also need it for 5G. More likely 2020 is the period when mobiles, machines and certain fixed applications will come; a few will come by the end of this year or early next year. But I would say mobile 5G looks like 2020. India will be in step for that.

But vendors say that one-tenth of the cost will be on capex and opex...

It could be even one-fiftieth. But it’s not that your $3 billion will become $200 million. It still remains $3-4 billion a year. That will mean capacity will be 20x-50x. That’s why they talk about cost being a lot. Even in this hour of difficulty and stress in the Indian market, we are still spending $3-3.5 billion to upgrade technology. I think that is what the government has to see in the New Telecom Policy (NTP). It should have the remedies to ensure that the health of the telecom industry is robust.

As the Chairman of GSMA and also with Airtel in mind, what are your top suggestions for the NTP?

I would say GSMA’s principal job is to keep on lobbying with various government bodies: ITU, FCC, all the global standard bodies and governments, to ensure spectrum availability, and to ensure a level playing field. That is something GSMA has been doing and will continue to do so in the future. Spectrum availability is the lifeline of the industry. It is the job of GSMA, which it does that all the time. GSMA does not concentrate on local issues.

India is one of the most taxed countries in the world and is also using a heavy hand in terms of taxing the telecom industry. I think we have heard some very good initial comments from DoT/TRAI. TRAI has given some recommendations on this too. Digital India is a dream of our Prime Minister, so obviously the industry needs tax levels be lowered. One part is rationalisation of levies of our sector.

What are your views on the spat between COAI and TRAI? Will Airtel go to court?

I don’t think there is any choice for the operators. We heard the views of one of the leading operators (Vodafone) on the predatory pricing order. Vittorio Colao (Vodafone global CEO) made a very strong comment and we have heard TRAI’s response.

This tariff order by TRAI binds operators from conducting their business in an orderly manner. I cannot envisage anything other than a legal challenge to counter this order. Nothing can be worse than free service. We faced nine months of free services and we will have to face this one too. We believe we must have the right to conduct business in a proper manner. That is what we are saying: that we will agitate at the proper forum.

In the end, if you are my customer, I must have the right to retain you with whatever tools I have. We must be provided with the right to conduct business in the market, which is enshrined in the Constitution. That is what we are saying.

FCC has changed its rules on net neutrality to allow US telecom companies to do deals with OTT players. Should TRAI follow suit?

Net neutrality has always been a contentious issue, and my view is that there is a lot of misunderstanding that is created, sometimes by, I would say vested interests, that telecom companies will gatekeep the internet, throttle speeds, prioritise certain services, and so on. No operator can do it without causing a massive disservice to its customers. They just can’t do it. The internet is an open platform. One global debate that GSMA is trying to encourage is to set up a minimum accessible service that is available to all. And to talk of that, there are certain services — autonomous cars for example, robotic surgeries, nuclear plants, sending man to Mars — all these may require segmented speeds and offerings. Those should probably be given on a non-discriminatory manner, but not at the cost of the industry.

Thankfully, in the 5G arena, you can slice the internet and give them those special services not at the cost of general service. I think for over-the-top (OTT) players we have been saying one thing: ‘same service, same rules’. That’s the only thing we have been talking about. The rest is that OTT players are co-existing, we get more traffic because of them and they survive because of the robust telecom networks. There is a very strong relationship between the two. The only area where it gets difficult is that they are not licensed, they do not pay licence fee, not having any access on monitoring, not having IUC..those are the things that TRAI needs to look at.

How about telecom operators versus online players?

Online players can’t be there without telecom players. Online players cannot exist where there is no network. Networks have to be there. On the issue of calling, giving them voices bundled with package... that debate has also been settled.

Are you ready for 5G spectrum auctions?

Point is what bands should be decided. Whether they are going for sub-GHz bands…that is what the spectrum will be or should have been realistic. Spectrum prices will be where they should have been, which is realistic. I mean in the last spectrum, auction has no reflection of the real price. We will be in the right zone for the new spectrum pricing. Whether the government wants to do it in one round or five rounds that they have to decide, but the pricing has to be right. My view is, it will depend on bands. Please remember, we now have sufficient spectrum and by going into 5G, we will need larger slices of spectrum. I don’t think this will happen in a hurry because the government will also have to try which bands are to be auctioned. World Radiocommunication Conference (WRC) is coming in 2019 in Sharm El Sheikh, Egypt which will really nail the 5G debate. Its a year and a half away. The real 5G allocation of spectrum will start bringing in with some day-to-day applications, but eventually the ecosystem will be developed on the bands which are decided in WRC in 2019. For example, 3.3-3.4 GHz bands have also been tried in South Korea. I won’t give a date to the auctions. Let them (government) decide when they want to do it, but we will now take the spectrum when we need it.

Did you misread Reliance Jio’s tactics on free services?

Why do you say that? We have been the most prepared operator in India in terms of facing the onslaught of the new operator. There are only three operators now and we are holding ground. Obviously, when somebody new comes in, he will pick up momentum and get a share. The point is that with the pricing at where it is today, if we offer below that, there is no industry left. I would say nothing can be worse than free. We have faced nine months already, we will face this also.

SingTel has been increasing its share in Airtel so would SingTel take control of Airtel?

The headline message here is that SingTel even in this otherwise difficult environment in the Indian telecom industry, has absolute confidence in Airtel and stands behind it like a rock. And this last significant investment that they have committed in their holding company clearly sends out a message that SingTel, which is known as an entity of Temasek, stands behind it. To that mind, it should give a lot of assurance to a lot of stakeholders and to the companies standing behind.

Will Airtel announce some big acquisitions this year...Aircel maybe?

The Indian market has nothing left to offer. Aircel is not there. It is switching off its network everywhere. Aircel is no more an entity to be taken up. About 50 per cent of those 80 million subscribers are porting out to our network everyday. All the people are porting and we are getting more than 50 per cent share.

The writer is in Barcelona to cover the Mobile World Congress at the invitation of Huawei India

Published on February 28, 2018

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