Telecom operators have opposed the public wifi model recommended by the Telecom Regulatory Authority of India (TRAI). The reasons cited are its adverse impact on the debt-ridden industry and compromising national security.
Why is this important
- TRAI had recommended that the Public Data Office Aggregator (PDOA) should be allowed to resell internet services through a PCOs type of set-up that will be called Public Data Offices (PDO).
- The regulator had recommended that like cyber cafes, PDOA should be allowed to provide internet access services after registering themselves with the telecom department.
- The Cellular Operators Association of India (COAI) is of the opinion that the selling internet services without a licence will bypass the present licensing framework and could seriously compromise the national security.
- COAI, which consists of Bharti Airtel, Reliance Jio, Vodafone, Idea Cellular etc also think that it will be detrimental to the massive investments already made in spectrum and telecom infrastructure.
PDOA has the potential to cause huge loss to government’s revenue. This is because PDOAs and PDOs would not pay any spectrum usage charge (SUC) or upfront payment for spectrum to the government.
Stocks to be impacted
According to COAI, a licence is required even if the internet services are provided to the end customers using de-licensed spectrum band, however, no such condition has been imposed on unlicensed entities.
The implementation of PDOA can lead to a non-level playing field between license holding incumbent telecom operators and those who will provide internet service without a licence.
Bharti Airtel Ltd. (CMP: Rs. 363.9 , Mkt Cap: Rs. 1,45,445 crores, FY2020 EV/EBITDA: 6.8)
Idea Cellular Ltd. (CMP: Rs. 55.3, Mkt Cap: Rs. 24,110 crores, FY2020 EV/EBITDA: 11.3)