Hyderabad: Telecom sector, one of the bright spots of India’s post-liberalisation era, is going through a rough patch.
The Supreme Court’s ruling on Rs 1.47 crore Adjusted Gross Revenue (AGR) dues has pushed major players Bharti Airtel and Vodafone-Idea into financial troubles.
Expressing inability, both companies pleaded with the government to extend the deadline for payment.
Unverified reports suggest that Vodafone-Idea may file for bankruptcy if it is hard-pressed for immediate payment.
What is at stake?
Experts opine that not only the telecom companies are staring at an uncertain future but also India’s tryst with the much needed 5G technology is becoming elusive.
To provide 5G telecom services, companies need thousands of crores of rupees to buy spectrum and upgrade existing 4G infrastructure to 5G.
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In fact, Bharti Airtel had said that it will not buy 5G spectrum in the upcoming auction if its base price is fixed at Rs 492 crore per megahertz as recommended by the Telecom Regulatory Authority of India (TRAI).
Industry bodies also asking the government to postpone 5G trials that are scheduled to be held in April-June 2020.
"Auction of 5G spectrum should be taken up after 2-3 years, which will help the government get proper valuations of the 5G airwaves", said PHD Chamber of Commerce and Industry.
US Sanctions on Huawei
Even if the government accepts the telcos' demand for extending the deadline for AGR payments, 5G has to cross one more hurdle i.e. sanctions on Huawei.
Washington has been pressing allies to ban Huawei, one of the world's largest tech firms, from next-generation 5G mobile data networks, saying it is a security risk.
The United States' ambassador to Germany said that President Donald Trump had threatened to cut off intelligence-sharing with countries that dealt with Chinese tech firm Huawei.
After a lot of deliberation and delay, the Government of India allowed Huawei in December 2019 to participate in 5G trials.
It is worth noting that Bharti Airtel and Voda-idea have joined hands with Huawei to partner for 5G trials.
It is to be seen that in an election year, US President Donald Trump will back down on his sanctions on Huawei.
What will be the impact of 5G delay?
India has come a long way from 2G to 4G in the last two decades. 4G has opened up new business opportunities in the field of e-commerce, health, education, etc.
Experts believe that the 5G telecom technology would help India is growing on a much faster pace.
“Principal advantage of 5G spectrum would be the expansion of the digital economy. A lot of services which are not possible to be delivered today would be digitally delivered with the use of 5G spectrum” said Subhash Chandra Garg, Ex-Finance Secretary, in a blog post.
“5G telecom spectrum will build digital expressways/super highways. Future economy, the digital economy, will be built on these digital super highways” he opined.
