Vodafone Idea’s chairman Himanshu Kapania said the recent telecom reforms have changed global investors‘ perception about the government now viewing the sector as a key infrastructure provider instead of purely a revenue generator for the national exchequer.
His comments come even as the loss-making Vodafone Idea continues to aggressively engage with global investors such as private equity player Apollo Global to raise at least $1 billion it requires to meet immediate repayments and keep pace with financially-stronger adversaries, Reliance Jio and Bharti Airtel. Its shares on Thursday touched a 52-week high of Rs 16.70, before closing 14.98% higher at Rs 16.43 on the BSE, on hopes that it will be able to close a fundraising shortly.
Top executives of India’s biggest telecom companies also said that average revenue per user (ARPU) needed to rise further to give telcos the ammo to invest top dollars in the upcoming 5G roll-outs. They also called on the government to keep 5G spectrum prices nominal, encourage development of India-centric use cases and more sharing of active infrastructure between private operators to boost proliferation of the next-gen mobile broadband services in India.
“Global investors are acknowledging the shift in the government’s past approach of treating telecom as a revenue generator to the new policy direction of treating it as an infrastructure provider for digital services, paving the way for India’s vision of becoming a top economy by 2030,” Kapania said on the Day 2 of the India Mobile Congress virtual event Thursday.
Kapania’s comments come at a time when things are starting to look up for the beleaguered telco, on the back of the recently-announced telecom reforms package by the government and the broad based prepaid tariff hikes that Vi took last month to boost revenues.
Bharti Enterprises vice chairman Akhil Gupta, though, said telcos’ ARPUs need to rise to Rs 300 (from well under Rs 150 now on average) for the sector to be “financially secure and stable on a sustained basis” and to handle the impending large investments in 5G deployments.
He said the recent 20-25% tariff hikes for prepaid users taken by the Big 3 telcos were “a significant but a small step” towards sustained financial performance of the telecom sector.
Gupta also urged the government to ensure 5G spectrum reserve prices are nominal in the upcoming auction – likely around April-May 2022. “Nominal reserve prices with stringent roll-out obligations will enable operators to invest more in networks and a little less in spectrum,” he said.
Vi managing director Ravinder Takkar backed the view, saying issues relating to spectrum availability, significantly lower prices and easy payment terms need to be addressed on a priority basis. “Access to adequate cost-efficient spectrum would be critical for making necessary network investments in 5G roll-out in the country.”
Takkar added that the telecom regulator has estimated that a whopping $60-70 billion of investments are required for 5G implementation in India.
Jio’s MD Sanjay Mashruwala, in turn, said 5G use cases and applications around remote healthcare, agriculture and even autonomous driving need to be designed differently for the next-gen technology to work in India as regional market conditions are very different from western countries.
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