Vodafone Idea to govt: No need to hold spectrum auction until 2020

Amid a raging financial crisis in the industry, India's largest telecom operator Vodafone Idea has urged the telecom department not to hold spectrum auction till 2020, on the grounds that fresh need for quality radiowaves will arise only once the 5G ecosystem is ready, according to a government source.

A letter to this effect has been written by Vodafone Idea Ltd to the Department of Telecom (DoT), said the source who did not wish to be named.

When contacted, Vodafone Idea Ltd in an e-mail said, "For 5G to work, a robust 4G network is a must. Accordingly, telecom service providers in India are currently focused on optimising 4G networks and making them 5G ready, for which they have sufficient spectrum."

Once the 5G ecosystem, including enabling hardware, develops and India-specific use cases are successfully piloted, a need for more quality spectrum will arise, the company said adding "this is likely to take up to 2020".

"In the interim, a diligent implementation of NDCP 2018 (National Digital Communications Policy) that rightly treats telecom as a critical enabler for a digital economy will help the financially stressed telecom sector strengthen. Going forward, spectrum must be made affordable such that it empowers the Indian telecom sector to fulfil its designated role of making broadband accessible to all and for achieving the larger vision of Digital India," said Vodafone Idea, in an email response to PTI.

The move comes at a time when a majority of telecom players are facing a financial turmoil. Over the past few years, India's telecom market had become cut-throat where nearly a dozen players jostled for market share, pummelling the call rates to amongst the lowest in the world. Competition has only intensified since 2016, when Reliance Jio Infocomm, owned by India's richest man Mukesh Ambani, stormed into the market and offered free calls and dirt cheap data. This triggered consolidation in the industry - the most prominent being that of Vodafone and Idea.

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In fact, the industry has been seeking urgent relief measures entailing debt restructuring, cut in levies, and release of GST input tax credit locked up with the government. Billionaire Kumar Mangalam Birla, head of Vodafone Idea Ltd, had recently sent an SOS to the government for deferring statutory payments in a sector that is not generating enough cash to even service loans. The Vodafone Idea chief had also expressed concern over Rs 30,000 crore that is locked up on account of GST payment under 'reverse charge mechanism'.