India's No.1 PU & Degree With Integrated IAS & IPS(UPSC/PSC) Training College.
“Telecom Industry is facing several challenges in India”. Comment on the validity of the statement and justify your answer.
Introduction:
Indian telecom industry is almost in the verge of getting into duopoly with other companies slowly running out of the business due to various issues. Telcos of India had enjoyed a fair share of profits in previous years. But now the situation has changed with advancement in technology and also stringent rules in regard with allocation of spectrum bandwidth.
Body:
Importance of telecom sector in India:
- It provides key infrastructure for basic functioning of IT and related sectors
- Communication is being considered as a requirement in today’s dynamic world
- Services sector is driven by Information and Communication
- Cost effectiveness
- Environment friendly in most cases.
Challenges:
- Adjusted Gross Revenue Crisis(AGR):- A huge amount of around 1.4 lakh crores had to be paid by the service providers to the government.
- Failure of multiple foreign tie-ups- As seen in the case of Tata Docomo
- Slow adoption of technlogy-Transition from different generations of mobile communication took lot of time
- Corruption- Scams such as 2g
- Improper loan disbursal by banks
- Uncompetitiveness- Closure of many companies such as Uninor, Rcom, Aircel
- Increased risk of debt
- Closure of Public Sector Units like BSNL and MTNL
Conclusion:
Although a lot of measures are being taken to revive this sector, private companies are still not able to gain their profits. The fact that the players which were previoulsy present are nowehere in the market itself shows the incompetence in the sector. On the other hand PSU’s have also failed to meet their objectives since long time.Thus there are lot of challenges for new entrants as well as existing companies.
