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Govt, banks and telcos needs to work out the debt issue together: IT Secretary

NEW DELHI: Despite huge untapped potential remaining, the telecom sector is currently undergoing one of its most challenging times, said members of the panel discussion on ‘New business drivers and new challengers’ during the ET India Mobile Congress in New Delhi on Friday.

P Balaji, Director - Regulatory, External Affairs & CSR, Vodafone India, said that while the industry had one of the lowest tariffs in the world, it pays one the highest taxes. Also, the collaboration on technology and infrastructure between players is still low. "There has to be a good balance for the consumers to have new services and the industry to continue to invest in things which will have shareholder return."

The telecom industry in the country is going through a wave of consolidation sparked by fierce competition which has been triggered by the launch of Reliance Jio.

Addressing some of the concerns of the industry players, Aruna Sundararajan, secretary, ministry of electronics and information technology said that over the last two years the government has striven to have a policy environment that has enabled telecom operators to grow and invest more. "As far as the debt overhang issue is concerned, it cannot be addressed in overnight." Sundararajan added that the telecom companies, Banks and the government will have to work together on finding a solution. "We need to take a holistic view on what needs to be done," she added.

Sundararajan, who has had a stint in the department of telecom earlier said that because of the duty differential brought in by this government, manufacturing—especially mobile manufacturing - has received a huge push. "Even Apple is actively looking at coming to India," she added.

Hari Om Rai, chairman and managing director of Lava International said that he sees a huge opportunity for manufacturing in India. "Low-end work is moving out of China. There is a $2 trillion electronics industry and $250 billion mobile industry. India is ready to take on mobile manufacturing," he said.

On the impact of the entry of Reliance Jio, Harmeen Mehta, global CIO and head of digital of Bharti Airtel said that the entry of new player has made the incumbents think differently. "But we can’t play the Reliance Jio game, we have to play our own game." She added that as new technologies such as 5G are approaching, possibly old ones such as 2G will have to make way since the towers will have to freed up to make more room.

The panel agreed that more collaboration between the industry players - especially in the technology and the infrastructure side - is welcome and ease some pain of the sector.

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