Regulatory decisions unduly favoured Reliance Jio: Vodafone chief

Chennai: British telecom giant Vodafone has alleged that in the last two years there were many regulatory outcomes which worked against the whole telecom industry in India, except Reliance Jio.

The comments by Vodafone chief executive officer Nick Read came as telecom players are looking to “normalise” tariff rates across the country, which was lowered due to the onslaught of Mukesh Ambani-led Reliace Jio in September 2016.

“Ever since the entry of Reliance Jio, which disrupted the whole telecom industry with free voice and cheap data offerings, the incumbents have faced financial stress. There were a slew of regulatory decision regarding predatory pricing, interconnect charges etc, which have not gone down well with the incumbent operators,” said Vodafone global CEO, Nick Read.

However, Read did not specify the instances where he felt that Jio had been given special favours by the government or telecom regulator TRAI.

Level-playing field

“We only ask for a level-playing field in terms of regulation. I think it is fair to say that for the past two years, we have had many regulatory outcomes that have worked against everyone iin the market except Jio,” said Nick Read.

Read said the pricing environment in India was artificially too low. He termed it artificial because all three operators were haemorrhaging cash. He said it can’t be a sustainable position going forward and therefore at some point, pricing needs to return to a more normalised level and that requires all players to sit back and say what is a healthy industry level.

“At some point, pricing needs to return to a more normalised level,” Read said about the current tariff situation. He said there is a need for all telecom firms to discuss the current financial position. “It requires all players to ultimately sit back and say what is a healthy industry level,” Read said.

We joined hands because…

Due to the decrease in revenues of the telecom players, the government’s revenues by way of licence fee and spectrum usage charge declined, said Read and added that it was because of the heightened competition that Vodafone India and Idea Cellular merged to remain competitive.

“I was in India in October reviewing the strategy. I went back in January and saw the government and the team again. I think we are making really good progress on the integration. We have really accelerated it from four years to two years. We want to invest in and integrate networks because there is a lot of data traffic and we need performance. We are also raising capital,” Read said, regarding the integration of Vodafone and Idea Cellular’s network.

The comments gain significance as the government wants to take a lead in the introduction of 5G and has initiated steps in the direction.

Field trials of 5G are expected to begin soon where telecom companies, in partership with network providers will showcase utility cases around the new generation network.

With Reliance Jio making a dent in the operations of telecom players, the implementation of the high-speed and admittedly pricier network will see telcos struggling to pump in cash, industry experts state.

Not good
Commenting on Huawei, Read said blocking of Huawei will not be good for industry. He said, “Vodafone is using Huawei’s radio equipment to roll out 5G across Europe and only the roll out of core network has been paused. Vodaone Idea has submitted a joint application to the Department of Telecommunications (DoT) for doing the 5G trials.” The government is yet to take a final decision on Huawei.

NT Bureau