Description
we delve deep into the critical state of the Indian telecom sector. The recent price hikes by JIO and Airtel have sparked concerns among consumers and highlighted the urgent need for more telecom companies to ensure competitive pricing and improved services.
Success Story
Friends, just a few days ago, as soon as Jio increased the rates of its plans, within a few hours there was an increase in the prices of Airtel and Vi. After which people became so angry that they started thinking about porting their SIM. But even if it should be ported to whom, because these are the three companies which are ruling the entire Indian telecom sector and among them, the majority and market share is only with Jio and Airtel. Whereas BSNL, which once led this market, is now reduced to name only.
Because even if a person thinks of porting to BSNL, its poor network and service does not allow people to switch. In such a situation, you must be wondering whether there is any player at this time who can come into the market strongly and leave Jio and Airtel behind. Because at present such consumers need a new and affordable telecom company. By the way, let us tell you that Aircel still has unused spectrum left in 22 circles.
Due to which the discussion of Aircel’s comeback is also in full swing in the market. But the question is that even if a new company comes into the market, will it be able to compete with Jio and Airtel? Does BSNL really have enough strength left to compete with the engine and why does this market need more telecom companies now? We will know everything in today’s blog. So friends, when Jio was offering us free data and calls, we enjoyed it a lot. Although after Even when he removed the free offer and made it paid, people adjusted their minds in such a way that this was bound to happen sooner or later.
And yes, because of Jio, other companies present at that time also had to reduce their rates considerably. But now the sudden increase of up to 35 percent is putting a heavy burden on the budget of a common man. And when Jio increased the price, then how could Airtel and VIP lag behind. Now basically Vi does not have any special place in the market, but Jio and Airtel have together created a policy and the situation is such that even if they increase the price five times, we will still be able to buy anything. Can’t.
Yes, if we look at the telecom industry 10 years ago, it was completely different because at that time there were many national and international companies like Airtel, Vodafone, Idea, Reliance Communication, Tata Docomo, BSNL, Aircel, Uninor, Videocon and MTNL. were present, which were providing very good services at that time within their respective areas and due to the presence of so many players, there used to be a fair competition in the market. But the question arises that if so many telecom companies were present in the market 10 years ago, then why only four are left today. After all, what is the reason behind the ruin of these other companies?
Actually friends, there are many reasons behind the closure of these companies but the first one is 2G spectrum scam which is one of the most popular scams in the country. Actually in 2008, the Department of Telecommunication had started the work of allocating 2G spectrum. Now the then Telecom Minister A Raja started giving licenses to the company on first come and first serve policy instead of proper auction. This means that the companies which come first will be given spectrum at a lower price.
The effect of this was that the companies which were not even eligible for spectrum, also got licenses and after seeing this policy, many new companies also came into the market. Who did not have any experience related to the telecom sector. Later in the year 2010, when the Comptroller and Auditor General of India i.e. CAG published a report, then it was told that how this entire scam happened and how due to this scam, the government got a loss of Rs 1,00,076. There has been a loss of thousands of crores of rupees.
Now after the report came out, public and political pressure on the government started increasing a lot. People started demanding action on this matter as soon as possible. After which A. Raja was arrested and the entire case reached the Supreme Court. After getting to the bottom of the matter, the Supreme Court gave its verdict on February 2, 2012 and said that this allocation is completely unconstitutional. In which the officials have acted arbitrarily and misused their power.
And friends, in a similar way, 122 spectrum licenses were canceled, after which many telecom companies were locked forever and these included Uninor’s 38 lakhs, Tesla also, like MTS formed by the joint venture of Russian company Sistema and Satyam Group. Big companies were involved. But friends, till that time the situation was not as bad as it is today. Because even after the 2G scam, companies like Airtel, Vodafone, Idea, Reliance, Tata Docomo were present in the telecom sector. Because of which people still had multiple options available.
After the decision of the Supreme Court, the government started the process of re-locating the spectrum and for this a proper auction was conducted which was very competitive and due to this the price of spectrum was also bid very high. Now friends, the telecom company was left with no other option but to buy the spectrum at an expensive price. That is why there was a lot of financial burden on them and most of the companies had to take loans to buy spectrum.
But since then, due to high debt and financial pressure, the telecom company faced a lot of problems in running its operations. Now friends, all these telecom companies were still struggling with these problems when Jio was launched on 5th September 2016, as soon as the map of the entire telecom sector changed. Because at a time when every company was engaged in providing 3G service, Jio spent ₹ 3.500000 crore and introduced high speed 4G network in India. That too absolutely free.
That is, those people who were forced to use limited internet in very expensive plans and used to spend the whole month in one or two GB data, at that time Jio started providing services like internet and calling for free, that too unlimited. Now friends, this free offer was enjoyed a lot by the users but it dealt a big blow to the Indian telecom sector. Jio kept all its services absolutely free for six months and when the plans were introduced, they were very cheap.
After which other companies had to reduce their prices even without wanting to. Due to this strategy of Jio, financially free companies got drowned in huge debts and Tata Docomo, Aircel and many like companies had to declare bankruptcy. Now only five telecom companies were left in the market.
Jio, Airtel, Vodafone, Idea and BSNL. Now, since Airtel was financially very strong, it somehow survived and today it is the only company which is standing strongly in front of Jio. In view of the financial pressure and high competition in 2018, Vodafone and Idea decided to merge with each other and then on 31 August 2018, a combined entity named Vodafone Idea Limited was formed, which we know today as Vi. Know by name. And friends, after this merger, both these companies definitely got some strength but only for a short period of time.
Because in the year 2019, such a decision of the court came that Vi had outstanding of 58 thousand 200 ₹ 54 crores. Actually, in 1999, the government had made a rule under which all telecom companies have to pay eight percent of their revenue as license fee. According to the rules, companies have to pay eight percent of the revenue from both telecom and non-telecom services as license fee. But friends, here the telecom company said that the license fee should be charged only on the revenue from telecom service.
Therefore, they will not pay the money as license fee which was coming from non-telecom services. However, friends, in October 2019, the court ruled that all telecom companies will have to follow the rules that have already been defined. And friends, the biggest impact of this decision was on Vi. Because he got 58 thousand 254 crores had to be paid to the government, which was the highest compared to other telecom companies. Whereas the same Jio had come only in 2016, that is why he had to pay the least amount to the government.
Now friends, Jio and Airtel paid this money but arranging such a huge amount had become a big challenge for Vi, which was already heavily in debt. And friends, in exchange for this outstanding amount, the government later acquired 33% shares of Vi in its name in February 2023. In this way, Vi, which had come together to take on Jio and Airtel, got stuck in debt. Because of this the company became even more financially weak. The effect of which was soon visible on their infrastructure also.
Complaints regarding their services increased among the people and ultimately the company lost its reputation. Apart from this, according to Telecom Regulatory Authority of India i.e. TRAI, Vi was earning more than one million subscribers every month from November 2023 to February 2024. And it is clear from this that at present Vi does not seem to be giving competition to Jio and Airtel by any distance. In such a situation, would it be right to expect from BSNL?
Because after the price hike of Jio, people are porting their SIM to BSNL. Due to this, many people feel that BSNL will uproot both of them. But to tell you the truth, this is not within the reach of BSNL because even though BSNL has a huge network base, but due to the old infrastructure, we get very weak signal and this is the reason that in today’s era of high speed internet, BSNL It fails to give people the experience that Jio and Airtel are giving.
Apart from this, BSNL is far behind other companies in network and technology upgrades. Because while Airtel and Jio have launched 5G, BSNL is still preparing to launch 4G. Although BSNL, being a government company, gets a lot of financial support from the government, but despite this it is not able to improve its services. Actually, being a government company, BSNL has to face many complexities like slow decision making, delay, approval process and the like.
Also, despite having more workforce, the productivity of BSNL employees is very slow in comparison to private players. Apart from this, if you have been a BSNL user then its poor customer service must have troubled you a lot. And friends, due to all these reasons, people started moving away from BSNL and BSNL which was once the market king, is now fighting for its survival.
BSNL Connecting India Bharat Sanchar Nigam Limited. Completely indigenous. In such a situation, the last question that remains is whether any new player will be able to end this arbitrariness of Airtel and Jio by coming into the market. Now till some time ago, people thought that Gautam Adani would do this work, because during the spectrum auction of 2022, when Adani Group bought 5G spectrum, people thought that Gautam Adani is now going to enter the telecom sector as well. .
But then the dreams of the people were dashed. When he came to know that Adani had purchased very limited spectrum for the purpose of telecom sector. Not to enter but only for my business. To create advanced technology and better communication system. In such a situation, if we remove Adani from the list, then who is there who has the possibility of entry in the telecom sector. Now the names of some old players also come up again and again, like Aircel and Anil Ambani’s Reliance Communication which was closed after the arrival of Jio, they still have a lot of power.
Spectrum is left. In such a situation, if these players want, they can return to the market. But still I do not think that either of these two will come to struggle again in this competitive market. Because for this they will have to go through many challenges which is very difficult for any company to make a comeback because if we look at Vodafone and Idea, eight years ago both of them were big names in the telecom sector. And they had excellent infrastructure and a large customer base.
In such a situation, when both of them are struggling, then how will a new company which has to start everything from almost zero, survive? Therefore, we can say that the space for the comeback of any new or old company in the Indian telecom sector is almost over and at present no new player is seen entering this market.
But friends, if someone still enters then we should fully support him because this will not only end the power of Jio and Airtel but will also increase competition in the telecom sector. Due to which the pressure on other companies to improve their services and keep prices reasonable will increase. Rest, please tell us what you have to say about this price hike of Airtel and Jio and their arbitrariness.
Anyway, see you again with the powerful explanation of the Success Story.
