CMR: Budget has nothing concrete to propose that could distress the telecom sector

The budget 2018 proposal tabled by the finance minister, Arun Jaitley, has nothing concrete to propose that could distress the telecom sector according to Cybermedia Research.

However, initiatives like setting up of test bed by DoT along with IIT Chennai for 5G technology indigenization and Niti Aayog to be made the anchor organization for driving AI and Machine Learning in India shall have a positive bearing as these are steps to make India future ready.

For the immediate benefit, the increase in imports duty from 15 percent to 20 percent on handsets is going to give more measurable reason for brands to Make in India. Other than this, there is no such proposal that could support the Telecom sector to coup up with the legacy deficiencies while attempting to bring the latest to the consumers.

For Digital India initiative, Telecom is a critical resource, unless it is not strengthened and supported holistically through short, medium and long-range interventions, the sector would not be in a position to take forward the country towards a trillion-dollar digital economy with all its potential.

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"There is complete silence on providing any immediate relief to the sector which is facing rising liabilities as well as declining revenues. In such a scenario, the sector shall only become weaker and won't be able to employ full potential behind the transformation to a digital economy," added Faisal Kawoosa, Principal Analyst, Telecom and ESDM in the report.

He said that "Programmes such as Start-up India and Smart Cities Mission are going to find it difficult to maintain the pace of desired growth with a weak telecom sector.

"The budget should have at least introduced proposals on how the process of digitalizing the half a billion of telecom users could be fast-tracked. Any single impetus to the industry in this direction would have brought in a lot of enthusiasm in the sector and sow the seeds of changing the lives at the lowest level of strata in our economy," he added.

CMR further added that Digital India is little of significance unless the lowest levels of the population are not meaningfully brought on to the landscape.

There is not better infrastructure than telecom that could result from that. But, there are inherent challenges in bringing the economically weaker section on board. These challenges are less from technology and more from a socio-economic profile of the intended users. Hence, even if the operators bring in the best of the technology with very well-crafted business plans, the government has to pull up the strings to uplift bridging the demand and supply gap.

At least for a while, Budget 2018 is a mute spectator on this challenge and this is no good news for the Telecom India.