Strengthening the competition in the telecom sector is key to achieve India’s digital ambitions. Elaborate (200 Words)
Refer - The Indian Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· What if another exit takes place and the market is effectively left as a duopoly with Jio and Airtel. The theory of contestable markets suggests that as long as there is a real threat of entry, even monopolies will be compelled to behave as if they are operating in a competitive market place.
· These work in the real world only when entry occurs at least once in a while. Who would wish to invest in Indian telecom today when the entry barriers in the form of spectrum acquisition costs, the licence fee burden as a percentage of the Adjusted Gross Revenue (AGR), infrastructure requirements and the policy uncertainty combine to produce an entry deterrence that any strategist would be proud of.
· The top three operators by market share Jio, Airtel and Vi, together account for 90 per cent of the subscriber base. The public sector is fourth and largely irrelevant to the process of competition, serving captive markets or where the private sector is unable or unwilling to deliver.
· The Court did concede that in the interest of saving telcos, and therefore banks, it may be necessary to grant an additional time period, but deemed 20 years as excessive. The final decision gives telcos 10 years to make good the payment.
· With reports of network quality deteriorating by almost 20 per cent, the need of the hour is to augment network capacity immediately and be future ready when 5G comes along.
· Having introduced spectrum auctions, the government could forsake other forms of licence fee. A nominal administrative fee could be charged instead to administer licences as is the practice in other countries. The National Digital Communications Policy of 2018 had recommended rationalisation of these charges.
