Seven Events That Defined the Telecom Sector in 2016
On September 5, the telecom sector witnessed the entry of the $20-billion start-up Reliance Jio. The launch of Jio was historic because it offered free voice calls for lifetime.
1. On September 5, the telecom sector witnessed the entry of the $20-billion start-up Reliance Jio. The launch of Jio was historic because it offered free voice calls for lifetime. Voice constitutes about 70 per cent of the revenues of telecom companies such as Airtel, Vodafone India and Idea Cellular. Jio claims that its data rate - 5 paise per megabyte - is lowest in the world.
2. The fight between Reliance Jio and incumbent operators for providing points of interconnect to Jio. Jio users are facing issues with calls on the network of incumbents. In October, telecom regulator TRAI recommended a penalty of Rs 3,050 crore on incumbents Airtel, Vodafone and Idea for violating the licence agreement, and denying interconnect points to Jio.
3. The net neutrality issue was raised last year when TRAI floated a consultation paper on 'differential pricing for data services'. The regulator later issued guidelines that prohibit telecom operators and internet companies from charging discriminatory tariffs for data services. This year, TRAI floated more consultation papers related to net neutrality.
4. Jio crossed 50 million subscriber base in record 83 days.
5. In March, Bharti Airtel bought Videocon Telecommunications' spectrum in six circles. The deal for 1800 MHz spectrum was priced at Rs 4,428 crore. Airtel also bought Aircel's 4G airwaves in seven circles for Rs 3,500 crore, enhancing its spectrum strength to take on Jio.
6. In September, Vodafone Group infused Rs 47,700 crore in Vodafone India. It was the largest foreign direct investment (FDI) in India in rupee terms, ahead of BP's $7.2-billion purchase of stake in Reliance Industries.
7. The spectrum auction conducted in October this year turned out to be lacklustre. Just 965 MHz out of 2,354.55 MHz could be sold. The government could garner bids worth Rs 65,789 crore out of the expected Rs 5.63 trillion (at base price). Spectrum in 700 MHz and 900 MHz could not be sold due to high reserve prices.