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Rakesh Mittal lays out telcos’ pains, says market still sustainable

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New Delhi, Oct 14, 2019-

Sharing the dais with Communications Minister Ravi Shankar Prasad, Bharti Enterprises Vice-Chairman Rakesh Bharti Mittal on Monday outlined the issues plaguing the Telecom sector and said high capital expenditure and right of way (RoW) issues created hurdles for the market players.

He, however, said that despite the “pain”, the market is very sustainable with three players who have equal market share. Mittal was speaking at the inaugural session of India Mobile Congress 2019 (IMC).

The Bharti Enterprise executive noted that annual capital expenditure (capex) by telecom operators in India is around 34 per cent of company’s revenue, compared to the global average if 20 per cent.

Bharti Enterprises is the parent company of telecom major Bharti Airtel.

“Around 34 per cent is spent on capex (by telcos in India). Airtel itself spent 40 per cent of its revenue last year,” Mittal said.

He also spoke of spectrum prices, and observed that the current base prices of spectrum by the Telecom Regulatory Authority of India (TRAI) are significantly higher than global prices.

Mittal also said that telcos require higher quantity of spectrum. “It is extremely difficult to layout fibre. M&As (mergers and acquisitions) are not very fast and swift,” he added.

On rights of way (RoW), he said that getting right of way clearance is still cumbersome.

Urging the government to make a better regulatory environment and bring more ease of doing business, Mittal noted that the industry players also have responsibilities, on their part and should commit and invest in next-generation technology and also work towards reduction in capex.

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