5G auction shows telecom industry is out of stress and ready for growth: Ashwini Vaishnaw

BL Mumbai Bureau | | Updated on: Jul 30, 2022
Ashwini Vaishnaw, Union IT Minister 

Ashwini Vaishnaw, Union IT Minister  | Photo Credit: KAMAL NARANG

Assures of 5G rollout by October

The record bidding for 5G spectrum in the ongoing auction shows that the telecom industry is out of stress and is ready for the next phase of growth, Union IT Minister Ashwini Vaishnaw said on Saturday. 

Speaking on the sidelines of an industry event to highlight investment opportunities in Indian 5G operations in Mumbai, Vaishnaw said, “The response to the 5G auction shows that the telecom industry now wants to expand. It shows that they have come out of the problems and are set for growth.” 

“Most players are ready to get into a fresh capex cycle. Banks are also ready to invest in the telecom sector again. Industry is confident of raising fresh funds,” he added. 

When asked about the possibility of the telecom sector spiralling into a duopoly, the Minister said that there are no such worries.  “Duopoly will not happen. The reforms announced in September have brought in good stability in the industry and the competitive levels are maintained. We are looking at newer players entering the sector. There’s going to be a good healthy competition.” 

Fresh Investments in Vodafone Idea

According to Vaishnaw, BSNL will emerge as a good market balancer after the Centre announced a ₹1.64 lakh crore revival package. He also said that Vodafone Idea will emerge as a stable player.  “We believe that there will be good fresh investment coming in Vodafone Idea Ltd. Looking at the current prospects, and the fact that they are participating in 5G auctions shows that it has come out of the stress situation and going forward it should emerge as a viable entity.”

The Centre had agreed to pick a 33 per cent stake in Vodafone Idea in lieu of the dues by the operator but Vaishnaw explained that the equity will be kept in an entity which will not have any day-to-day engagement with the management of the company. “It will remain a professionally managed company and as soon as the opportunity arises, the government stake will be given to the public,” he said. 

When asked if the high price of spectrum will further add pressure on operators, the minister said that the move by the Centre to lower the spectrum usage charge and allowing operators to pay the entire bid amount in 20 instalments at nominal interest, reduces the cash flow burden on the telecom sector. “They can focus on capex instead of worrying about how to pay the government,” he said. 

The Minister said that he believes that the telecom sector is entering a growth phase and India could emerge as the leader in 5G services globally.  “As soon as the auction ends we will allocate spectrum within a few days. The entire process is being done in record time. Since the Cabinet approved the auction, our team has been working day and night. We will show the same speed in allocating the spectrum, getting the agreements signed, making sure that roll out happens by early October. Within 1-2 years we should see good penetration of 5G services in the country. In other parts of the world, 4G continues to be a significant part of the network, we will buck that trend and get faster rollout of 5G in the country,” he said. 

Vaishnaw also spoke about rejigging existing laws governing the sector for which the Telecom Ministry has put out a consultation paper. 

Published on July 30, 2022
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