There was a time when consumers had a wide choice when it came to choosing a mobile service provider. There were at least ten operators who were competing for the same consumer base.
This all changed, first when the 2G Scam hit the operators and most of them lost their licenses and then when Reliance Jio took a back door entry into the mobile sector using a MBWA license.
Reliance entered the mobile sector after acquiring a pan India MBWA (Mobile Broadband Wireless Access) license. Policies were tweaked to allow Reliance to offer voice services on the MBWA license. This gave Reliance an undue advantage, it did not have to pay for voice license which other companies had paid for. It said that it will be using VoLTE technology to deliver voice calls. VoLTE stands for Voice over Long Term Evolution Technology.
As Reliance did not shell out the massive license fee that others had paid, it offered its services to people of the country for free and who does not love free! At the outset, customers were told that all data and voice services will be free on Reliance Jio, later this promise was withdrawn. In fact, even lifetime connections which allowed free incoming over the period of the life of the license of operator were withdrawn and today you have to pay a certain amount just to keep receiving calls.
Three operators are now left in the field. Reliance, Airtel and Vodafone Idea. Vodafone Idea is bleeding very heavily and has to pay license fees to TRAI. It is losing its subscriber base due to deteriorating quality of service. It is unable to pay vendors that provide it support services.
Recently, Vi lost a case where it had asked for recalculation of license fees. It is also under severe debt of 7800 odd Crores to Indus Tower Limited, the service provider that gives Vodafone its network reach. Although the two companies had come to agreement on payments, as per Indus, Vi is continuously defaulting on payment and the outstanding has now become a threat to its own existence. It has written to Vi in this regard but to no avail.
Recently, Government of India bailed out Vi by converting its dues in the company to shares. It purchased 34% shares in the company with a condition that the conversion of debt will take place once the share price crosses 10 Rupees (Par value). It is not known whether the debt has been converted or not as yet.
With Vi almost gone, our telecom sector will be reduced to a Duopoly. Although BSNL and MTNL still exist in this sector, they have been laid low by the government itself. Both of these PSU’s have been denied licenses and denuded while promoting private players over them.
A duopoly is a dangerous thing for the consumers. It take away from them the option of having a choice and as a result the players can gang up on consumers and charge anything that they wish to charge.
Hopefully a new government in 2024 will take a different path than the one taken by Modi Sarkar over the last nine and half years or so.
