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India's 2018 Telecom Policy: Are the Goals Achievable?

Gagandeep Kaur
3/13/2018
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India's government is poised to announce its latest national telecom policy later this month. Its hope is that new policy guidelines will help the sector's players to start planning for a wave of new technologies, including 5G, smart cities, blockchain and artificial intelligence. At the same time, it hopes to safeguard the interests of those who are currently unconnected.

The Telecom Regulatory Authority of India (TRAI) produced a consultation paper in January this year, inviting comments from industry stakeholders. Its main objectives, it said, were to attract investments totaling $100 billion in the communications sector, generate 2 million jobs and boost rural penetration to 100%. Authorities believe these measures will help India becomes a frontrunner in the so-called "fourth industrial revolution."

Government policy further hopes to create an environment in which the Internet of Things can flourish. It is aiming for about 5 billion IoT devices in the country by 2022. The TRAI has also recommended that government authorities set up a "single window" system for clearing right-of-way (RoW) permissions by next year. RoW has been a major pain point for telcos, often leading to delays.

But are the main goals achievable in the stipulated timeframe?

Goal 1: Raise investment of $100 billion by 2022
Possibly the most important objective is to attract investments of $100 billion by 2022. The industry is currently reeling under huge debts totaling 4.5 trillion Indian rupees ($69.2 billion), which seems unlikely to entice prospective investors. What's more, the recent consolidation in the market has left India with hardly any foreign telcos. That will also look worrying to the investment community.

To put all this in perspective, India attracted just $6 billion in foreign direct investment in the first half of 2017. The government may have to think of some innovative ways of attracting new investors.

Goal 2: Generate 2 million jobs by 2022
The regulator also wants to create about 2 million telecom jobs by 2022. But this would be at odds with the current industry trend. Nearly 150,000 people have already lost or are set to lose jobs because of market consolidation in the last year.

In addition, the hypercompetitive market environment means that telcos have started to focus on technologies and strategies for reducing operational and capital expenditure. AI-based systems and automation tools could make it even harder to create jobs in the next few years.

Goal 3: Achieve 100% teledensity
A key objective of the forthcoming policy is to ensure there is connectivity for all. At present, rural teledensity is around 56%, while urban teledensity is more than 100%.

Service providers look set to begin expanding into rural communities. Reliance Jio has already launched a tariff plan for the owners of the JioPhone, a device geared toward the needs of subscribers in smaller towns and cities, and other telcos are likely to come up with similar rural initiatives. Government initiatives including Digital India and India's recent MVNO policy might also support the expansion of services into rural areas. Whether such efforts will lead to 100% teledensity remains to be seen, but rural expansion should certainly witness an improvement.

— Gagandeep Kaur, contributing editor, special to Light Reading

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