Panel not keen on big policy intervention for telecom sector

Paterniano Del Favero
Agosto 12, 2017

Economic Survey results has come as a shocker with the increased share of telecom companies in the non-performing assets category after they witnessed a drastic fall in their revenue due to the entry of Relinace Jio. The adjusted gross revenue (earnings from the sale of telecom services) of the top three telecom companies in India namely Bharti Airtel, Vodafone India and Idea Cellular declined by 7.98%, 5.14% and 4.91%, respectively during the third quarter of 2016-17 compared to the last quarter.

Telecom minister Manoj Sinha has previously said that the government will not shy away from taking "bold steps" to save the sector which has been the poster child of connecting India.

"Though the total NPAs of telecom sector in public sector banks has fallen to Rs 2,335 crore in 2016-17 from Rs 3,456 crore in 2015-16, the share of NPAs of infrastructure sector increased to 8.7 per cent in 2016-17 from 5 per cent in 2015-16", the survey said.

Stating some available indicators were showing reasonably good performance in telecom with increase in the number of connections "reflecting the Jio effect", the survey said with introduction of Reliance Jio, competition shifted from cheaper calls to cheaper data.

The survey noted that India has gone above USA to become the largest smartphone market in the world after China with 275 million smartphone subscribers.

The survey said the industry also faces the issue of higher spectrum charges. The mobile industry in India accounts for 6.5% of the country's GDP and employs over 4 million people directly and indirectly, stated the survey.

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