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Comms minister Manoj Sinha meets operators, forms inter-ministerial group to draw up reforms.
India’s government on Thursday pledged to reform its telco policies in a bid to ease the pressure on a sector ravaged by a brutal price war.
Minister of Communications Manoj Sinha held face-to-face talks with representatives from the industry, during which he said corrective steps will be taken to ensure a return to orderly growth.
In a series of tweets, Sinha said the government has formed an inter-ministerial group (IMG) tasked with examining systemic issues facing telcos and recommending policy reforms and strategic interventions.
The IMG has already consulted banks and operators, and is expected to submit a report shortly, he said.
Total Telecom has contacted the minister requesting more information, and will update this story as needed.
India’s telecom sector is in a sorry state, with intense competition pressuring revenue and profit on the one hand, and high levels of indebtedness on the other.
The aggressive competitive tactics of Reliance Jio Infocomm, which offered free nationwide mobile voice, SMS and 4G data between early September 2016 and the end of March, prompted so-called incumbent players to respond with their own steep price cuts and promotions.
The price war prompted a wave of consolidation, with smaller operators heading for the exits, and bigger players hunting for greater scale.
Reliance Communications (RCom) has become something of a poster child for the current travails of Indian operators, and co-CEO Gurdeep Singh has been one of the louder voices calling on the government to step in.
In late May, RCom posted its first ever full year net loss. Looming doubts about its ability to pay down its hefty net debt of 443.45 billion rupees (€6.12 billion) prompted downgrades from no fewer than four credit rating agencies, including Fitch and Moody’s.
RCom sought to assure the market by reaching a deal with lenders to give it more time to meet repayment obligations. That move resulted in further downgrades by Fitch and Moody’s.
