Despite the ongoing upheavals in the Indian telecom sector, Aruna Sundararajan, chairman, Telecom Commission, and Secretary, Department of Telecommunication, believes India is a growth market for telecom, and says ‘we have only scratched the surface’.
Express caught up with Sundararajan, who was in Kochi to launch Geojit Financial’s mutual fund app. She complimented the steps taken by the Kerala government for its initiative to set up a robust fibre optic network in the state, saying a lot of Kerala’s development depends on how strong the communication backbone is.
Excerpts from the interview:
Q: Can you explain India’s growth in internet and mobile app?
Aruna: The ICRIER (Indian Council for Research on International Economic Relations) had conducted a study that came out last year, around July 2017.
It said that 17 percent growth in internet traffic has led to an increase in India’s GDP by Rs 7 lakh crore. The study also said mobile app economy is contributing USD20 billion of that.
Similarly, in mobile data consumption, India’s position has gone up from the 155th position to number 1 in 2017, beating China and the United States.
Q: What has contributed to the increase in India’s mobile and internet data consumption?
Aruna: The main reason is the entry of a disruptive new player in the market. They slashed tariff so much that today India’s data tariffs are 1/10th the cost of global tariff. So in data tariff, we are the lowest in the world. That’s one of the main reasons. The second is the penetration. So penetration and costs are the reasons.
Q: As we know, the telecom sector is now under severe stress with several companies reporting huge losses. One company (Aircel) has gone for bankruptcy filing. Don’t you think this disruptive pricing by a big player has led to this situation?
A: Technology is disruptive. If someone comes with a radically more effective technology, that player is able to reduce the cost.
Q: But this has affected the sector as a whole.
A: See, this is not happening for the first time in India. Every time a new player or a new technology comes in, we have new rounds of disruption.
When Airtel etc came in, there was a huge disruption to the existing players like BSNL. This is a second round of disruption. And all over the world we are seeing this. The issue is that the technology moves really fast. So, somebody has to really keep pace with technology.
Q So, it’s up to the market to determine the pricing?
A: It’s finally up to the market to decide the pricing, and it’s the regulator’s role to ensure that the consumer gets a good deal.
The government’s role is to create an enabling environment for the growth of telecom.
How do you see going from here for the telecom sector?
A: I believe India is a growth market for telecom. It’s one of the vibrant markets for data and telecom. We have only scratched the surface.
And therefore, in the coming months and years, I see robust growth prospects for the Indian telecom industry. I believe the coming phase will be a phase of consolidation and stabilisation.
Q: Do you have any time frame in mind for 4G coverage across the country, and the roll-out of 5G?
A: By end of this year, 80 percent of the country will have 4G; and the roll-out of 5G will start from 2020.
Q: You are in Kerala for the launch of Geojit Financial’s mobile app for mutual fund investments. Do you see convergence of mobile and financial sector players going forward?
A: Increasingly we will see a lot of convergence of content, platforms and networks. For example, in the US you are seeing a big convergence of content and networks. Here in India, we are seeing a convergence of banking payment platforms and the communication platforms. So, I think we will see more convergence in the coming days, especially on the content side.
Q: As more and more people enter the digital payment mode, security is a big issue. How are you addressing this?
A: Security is a big issue. The government of India is looking at this very closely. We are putting in place necessary steps to ensure the security. Already, financial sector CERT-in (Computer Emergency Response Team) is under establishment. Similarly, in the telecom sector, we are working on our own CERT.
Q: Yet, we are seeing several computer crimes, where people are losing money through computer/telecom transactions?
A: For that we need much more cyber literacy and cyber awareness. It’s not only about building strong systems. All the systems we put in place are as secure as the users. The users should also must be educated, and we must have mass programmes for that. – New Indian Express