Telecom Distress Call

Cut-throat competition and regulatory uncertainty have scarred the telecom sector. The recent tariff hike may rescue telcos for now, but subscribers will bear the brunt

- M.G. Arun

When the erstwhile Reliance Infocomm launched its landmark service in December 2002 with the catchline ‘Kar lo duniya mutthi mein (The world in your fist)’, many called it a revolution in the Indian telecom sector. For the first time, mobile telephony had been made affordable, unleashing its potential to connect Indians irrespective of where they lived or worked. Fourteen years later, when the Mukesh Ambani-led Reliance Jio launched its 4G service with VoLTE (voice over long-term evolution) technology in September 2016, the focus was on data, with high-speed video downloads and live-streaming of news, sports and entertainment becoming the new normal. But Jio’s entry also shook up the giant incumbents—Vodafone, Idea and Bharti Airtel—and uprooted Reliance Communications (what Reliance Infocomm came to be known as, and ironically, belonging to Mukesh’s brother Anil), which, saddled with gargantuan debt and obsolete CDMA technology, was easy game. With its rivals in the doldrums, Jio does indeed have the Indian telecom sector in its grip—but this has also raised serious questions for consumers. How will customers fare in a monopolistic or a duopolistic situation, with just one or two telecom players? Will they be vulnerable to serial price hikes? Is this the end of low tariffs, which have been mostly responsible for the large-scale use of value-added services such as data?