Lok Sabha Question No. 351 (STARRED), answered on 2020-03-18
Subject: Telecom Service Providers
Ministry: COMMUNICATIONS
Asked by: Thalikkottai Rajuthevar Baalu

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA STARRED QUESTION NO. 351 TO BE ANSWERED ON 18 TH  MARCH, 2020

## TELECOM SERVICE PROVIDERS

## *351.   SHRI T.R. BAALU:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the number of Telecom Service Providers (TSPs) have been reduced from ten to three;
- (b) if so, the details thereof and the reasons therefor;
- (c) whether  the  said  reduction  in  the  number  of  TSPs  will  adversely  affect  the  quality  of telecommunication services, if so, the details thereof and the reaction of the Government thereto; and
- (d) the steps taken/being taken by the Government to ensure competition and quality services in the telecom sector?

## ANSWER

## MINISTER OF COMMUNICATIONS, LAW & JUSTICE AND ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) to (d) A statement is laid on the Table of the House.

## STATEMENT TO BE LAID ON THE TABLE OF LOK SABHA IN RESPECT OF PARTS (a) to (d) OF LOK SABHA STARRED QUESTION NO. *351 FOR 18 TH  MARCH, 2020  REGARDING 'TELECOM SERVICE PROVIDERS'.

- (a) & (b) Since  2012,  number  of  Telecom  Service  Providers  (TSPs)  has  reduced  over  the  years.  At present, the following TSPs are offering wireless access services in the country:
- (i) Bharat Sanchar Nigam Limited/ Mahanagar Telephone Nigam Limited
- (ii) Bharti Airtel Limited
- (iii) Vodafone Idea Limited
- (iv) Reliance Jio Infocomm Limited

The reasons for reduction in number of TSPs are as follows:

- I. Hon'ble Supreme Court of India vide its judgement dated 02.02.2012 passed in the Writ Petition (Civil)  No.  423  of  2010,  cancelled  122 telecom  licenses.  Subsequently,  spectrum  was  delinked from the license and is being allocated through auction. TSPs, whose licenses were cancelled by the Hon'ble Supreme Court, were given an opportunity to participate in the auction for spectrum to  continue  telecom  services.  However,  M/s  Etisalat  DB  Telecom  Private  Limited,  M/s  Loop Telecom  Limited  and  M/s  STel  Private  Limited  did  not  participate  in  the  spectrum  auction process and closed their services.
- II. Consolidation  in  the  telecom  industry  due  to  mergers  also  reduced  the  number  of  TSPs.  The details are as follows:
3. (i) Sistema Shyam Teleservices Limited merged with Reliance Communications Limited
4. (ii) Telenor (India) Communication Private Limited merged with Bharti Airtel Limited
5. (iii) Vodafone  India  Limited  and  Vodafone  Mobile  Services  Limited  merged  with  Idea  Cellular Limited
6. (iv) Mobile  business  of  Tata  Teleservices  Limited  and  Tata  Teleservices  (Maharashtra)  Limited merged with Bharti Airtel Limited and Bharti Hexacom Limited
- III. TSPs  such  as  M/s  Aircel/  M/s  Dishnet  Wireless  Limited  and  M/s  Reliance  Communications Limited/  M/s  Reliance  Telecom  Limited  are  under-going  insolvency  proceedings  at  National Company Law Tribunal (NCLT), Mumbai under Insolvency and Bankruptcy Code (IBC), 2016. Although assets such as licenses and spectrum are still with the companies, no wireless telecom services are being provided through their telecom networks.
8. (c) Reduction  in  the  number  of  TSPs  has  not  affected  the  quality  of  telecommunication  services.  The number  of  base  stations  (viz.  Base  Transceiver  Station/  Node  B/  eNode  B)  has  increased  by  236%  from 6,49,834 (as on March, 2014) to 21,87,504 (as on Feb, 2020). There is a substantial increase in telecom network coverage  and  subscriber  base  as  well.  Presently,  TSPs  are  serving  more  than  115  crore  subscribers  in  the country and more than 95% of the population is covered with 4G network services.
9. (d) The Merger and Acquisition guidelines, 2014 prescribe a cap of 50% of the market share (on the basis of adjusted gross revenue as well as subscriber base), which may be held by a merged (resultant) entity. This ensures that sufficient  competition  remains  in  the  telecom  sector  after  merger  of TSPs. Merger  of TSPs can provide operational efficiency and the benefits of economies of scale to the merged entity.

Even  after  the  consolidation  in  telecom  sector,  there  is  sufficient  competition,  as  four  TSPs  are providing  services  in  each  licensed  service  area  (LSA)  in  wireless  access  services  segment.  Significant reduction  in  tariffs  for  voice  and  data  since  2016  has  resulted  in  availability  of  better  telecom  services  at affordable tariff, which also indicates presence of adequate competition in telecom sector.

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