Business & Investment

‘The moratorium on telecommunications membership fees gives you time to change. Tariff war is unlikely to happen. “

According to senior Deloitte India analysts, a four-year rest from the payment of regulatory fees offered as part of the Telecom Relief Package will allow operators time to transform and repair and cool price competition. ..

Reform sends a strong message to the global community, investors and lenders in the telecommunications sector, Peeyush Vaish, partners, The leader of Deloitte India said.

The Council of Ministers recently approved a blockbuster bailout package for stressed people This includes a four-year break from companies paying statutory fees, permission to share rare radio waves, a change in the definition of income for which surcharges are paid, and 100% foreign investment through automated routes. ..

Measures aimed at providing relief to companies such as Ltd (VIL), which has to pay thousands of rupees for past unprovisioned statutory membership fees, also includes the abolition of the Spectrum Usage Charge (SUC) for radio waves acquired at future spectrum auctions.

“The four-year period is enough to sort out the industry’s pricing issues,” Vaish told PTI.

Operators have four years to transform themselves. This is important. He said the player has enough ability to change himself.

“We expect all operators to be able to sort out costs and margins over the next four years,” he said.

The telephone company will “shape” and modify the course as needed over the next few years.

“A total of four years of moratorium is about three years after the launch of 5G, enough time for an organization to transform, restructure and get out of its current challenges,” he said.

Communications Minister Ashwini Weishnau recently said the 5G spectrum auction will “probably” take place in February 2022, and the government may even try the January timeline.

Vaish of Deloitte believes that numerous reform-related announcements have significantly reduced the potential for duopoly in the market, and price competition could train eyes on profitability and profitability. Expected to be calmed down by the telephone company.

This could continue as the market enters the 5G era.

“We also do not anticipate price competition for 5G services to acquire subscribers. Operators are wise and recognize that bloodshed does not help anyone. Therefore, the possibility of duopoly is significant. It will decrease, and price wars will decrease, “he says. Said.

That said, he predicted that it was very unlikely that tariffs would suddenly rise significantly overnight.

Businesses may continue to scoop down bottom or basic plans and attempt to gain more “wallet share” through a wide range of services. As a result, the redefinition of AGR paved the way for bundling more non-telecom products such as OTT, games and devices.

They may also exchange monthly plans for quarterly offers to ensure greater commitment from subscribers.

“Operators are unlikely to do anything significantly different and will instead focus on maintaining market share. Strategies will shift to focus on 5G auctions and customer retention,” Vaish said. Stated.

As the dust subsided and the sector returned to stability, Vaish dismissed concerns about possible cartelization in the market in the coming months.

“There is no cartelization in the industry. It’s a matter of supply and demand, and what works best for operators,” he said.

He said simpler terms on spectrum sharing would have a cool impact on future 5G auctions, reducing the likelihood of excessive and aggressive bidding.

Also, operators do not bid on all bands in 5G auctions, instead they choose the best band for them. According to him, this is because the spectrum is still available and new reforms are currently underway.

(Only the headlines and photos in this report may have been reworked by Business Standard staff. The rest of the content is automatically generated from the syndicate feed.)

‘The moratorium on telecommunications membership fees gives you time to change. Tariff war is unlikely to happen. ” ‘The moratorium on telecommunications membership fees gives you time to change. Tariff war is unlikely to happen. ”

Back to top button