His­tory Re­peats It­self

The In­dian telecom­mu­ni­ca­tions in­dus­try in FY12 had noth­ing much to cheer about hav­ing burnt its fingers with 3G and the only bright spot be­ing 4G emerg­ing in the scene as a wiser op­por­tu­nity

Voice&Data - - CONTENTS -

It was 2011 déjà vu for the In­dian telecom­mu­ni­ca­tions in­dus­try in FY12 and the erst­while poster boy of In­dian growth story of­fered us noth­ing more than a flashback of what hap­pened in 2011. Same old story. The in­dus­try did not see much growth, lacked mo­men­tum, lagged in fi­nal­iYing deals and the stake­hold­ers wore a pale look through­out the year. As if the in­dus­try did noth­ing the en­tire year and was sit­ting idle.

Yes, to a great ex­tent it was sit­ting idle. The hype of 3G wave ex­pected to sweep across the length and breadth of the coun­try, re­mained only in the air. And the op­er­a­tors who had put all their flesh and blood dur­ing the auc­tion to get spec­trum and li­censes, did not do any­thing sig­nif­i­cant to reach the masses and lacked sub­stan­tial 3G of­fer­ings. They did not ex­pand their net­work as per the re­quire­ment, di­rectly af­fect­ing the bal­ance sheet of equip­ment man­u­fac­tur­ers.

Nx­pec­ta­tions of large scale or­ders from big op­er­a­tors sim­ply re­mained as mere ex­pec­ta­tions through­out the year. If we look at the other side of the coin, we can’t even blame the op­er­a­tors sin­gu­larly for the dis­mal per­for­mance of the In­dian telecom­mu­ni­ca­tions in­dus­try. Free­dom to jump to 4G straight from 2G per­haps was too much for the coun­try and it made the in­dus­try con­fused and put the li­censees in dilemma. The op­er­a­tors who hold li­censes to of­fer both 3G and 4G are yet to de­cide where to put their money in. Wisely so, they know mint­ing of the next phase of money is only pos­si­ble with data and not voice any­more, and cus­tomers would any­way use voice—be it on 2G or 3G. Thus, in­vest­ment in BWA would be more wiser than in 3G. Per­haps that is why they are wait­ing to in­vest their (bankers’ and in­vestors’ too) hard-earned money in the dat­a­cen­tric of­fer­ings ie, the BWA ser­vices.

On the other hand, the an­nounce­ment of a new tele­com pol­icy to be drafted that would re­place the older ver­sion, warned and made the op­er­a­tors be­have more wisely. They were not sure what the new pol­icy would have in store, so they held back many or­ders, di­rectly af­fect­ing the equip­ment ven­dors’ busi­ness. Not only the op­er­a­tors, but PSUs and en­ter­prises too treaded very cau­tiously while float­ing ten­ders and new or­ders.

Pol­icy un­cer­tainty, look­ing at the fu­ture and over­look­ing the present, and the buy­ers’ and sell­ers’ over­all be­hav­ior al­most killed the in­dus­try in 2012. The

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