Snapshot
At current prices, the spectrum has gone out of the reach of a highly debt-ridden telecom industry.
One obvious way out is to lower base prices and allow the bidding to happen on revenue share. Companies which offer a higher future revenue share get more spectrum.
Details
The government’s ongoing spectrum auction looks like yielding a mouse: over Rs 5,63,000 crore worth of spectrum is on offer, including the super-premium 700 Mhz band, but bids at the end of the fourth day (5 October) had barely reached the treetop at Rs 63,000 crore.
No one is touching the high-priced 700 Mhz (priced at Rs 11,485 crore per Mhz) with a bargepole. Bidding is said to be concentrated around the 1,800 Mhz, 2,100 Mhz, 2,500 Mhz, 2,300 Mhz and 800 Mhz bands, and that too to fill gaps in operators’ current circles. No one is bidding skyhigh.
While Rs 63,000 crore is nothing to sniff at, the fact is high-priced spectrum is now reaching its natural limits of growth in demand. Not because spectrum is not needed, but because pricing has gone out of the reach of a highly debt-ridden telecom industry.
At last count, the industry had over Rs 3,80,000 crore of debt on its books, and the current auction will surely take it past the Rs 4,00,000 crore mark. The industry’s spirit may be willing, but the flesh is weak on balance-sheet risks.
While debt is forcing consolidation in the industry, with Aircel and Sistema merging with Reliance Communications, the industry continues to have at least two more players than what current voice and data tariffs can support. The weakest links in the telecom sector are Tata Teleservices and Telenor, neither of which has critical mass in terms of customers. The entry of Reliance Jio will push at least one of the two out.
But even if consolidation speeds up, the debt issue remains paramount. RBI Governor Urjit Patel mentioned telecom as one of the five most stressed sectors for bank lending.
At some point, the government has to realise that the health of the telecom sector is closely linked to the banking sector. When spectrum becomes excessively costly, it is banks who have to lend more to ensure its purchase.
Put another way, when government rakes in huge spectrum revenues, the money for it comes from its other pocket, government-owned banks. While no one is saying that any telecom company is going to go bust in the near future, high spectrum prices are becoming a problem.
We need a way out where spectrum is priced reasonably without showing the industry any special favours.
One obvious way out is to lower base prices and allow the bidding to happen on revenue share. Companies which offer a higher future revenue share get more spectrum. This will ensure that spectrum is paid for only after the customer base in built and revenues are generated rather than upfront.
It is time to rethink how spectrum should be priced. A Raja’s way was wrong, but there is no reason to head in the opposite direction of prescribing extortionate prices for spectrum. A middle path is needed.
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[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]2021 WEF Global Gender Gap report, which confirmed its 2016 finding of a decline in worldwide progress towards gender parity.
Over 2.8 billion women are legally restricted from having the same choice of jobs as men. As many as 104 countries still have laws preventing women from working in specific jobs, 59 countries have no laws on sexual harassment in the workplace, and it is astonishing that a handful of countries still allow husbands to legally stop their wives from working.
Globally, women’s participation in the labour force is estimated at 63% (as against 94% of men who participate), but India’s is at a dismal 25% or so currently. Most women are in informal and vulnerable employment—domestic help, agriculture, etc—and are always paid less than men.
Recent reports from Assam suggest that women workers in plantations are paid much less than men and never promoted to supervisory roles. The gender wage gap is about 24% globally, and women have lost far more jobs than men during lockdowns.
The problem of gender disparity is compounded by hurdles put up by governments, society and businesses: unequal access to social security schemes, banking services, education, digital services and so on, even as a glass ceiling has kept leadership roles out of women’s reach.
Yes, many governments and businesses had been working on parity before the pandemic struck. But the global gender gap, defined by differences reflected in the social, political, intellectual, cultural and economic attainments or attitudes of men and women, will not narrow in the near future without all major stakeholders working together on a clear agenda—that of economic growth by inclusion.
The WEF report estimates 135 years to close the gap at our current rate of progress based on four pillars: educational attainment, health, economic participation and political empowerment.
India has slipped from rank 112 to 140 in a single year, confirming how hard women were hit by the pandemic. Pakistan and Afghanistan are the only two Asian countries that fared worse.
Here are a few things we must do:
One, frame policies for equal-opportunity employment. Use technology and artificial intelligence to eliminate biases of gender, caste, etc, and select candidates at all levels on merit. Numerous surveys indicate that women in general have a better chance of landing jobs if their gender is not known to recruiters.
Two, foster a culture of gender sensitivity. Take a review of current policies and move from gender-neutral to gender-sensitive. Encourage and insist on diversity and inclusion at all levels, and promote more women internally to leadership roles. Demolish silos to let women grab potential opportunities in hitherto male-dominant roles. Work-from-home has taught us how efficiently women can manage flex-timings and productivity.
Three, deploy corporate social responsibility (CSR) funds for the education and skilling of women and girls at the bottom of the pyramid. CSR allocations to toilet building, the PM-Cares fund and firms’ own trusts could be re-channelled for this.
Four, get more women into research and development (R&D) roles. A study of over 4,000 companies found that more women in R&D jobs resulted in radical innovation. It appears women score far higher than men in championing change. If you seek growth from affordable products and services for low-income groups, women often have the best ideas.
Five, break barriers to allow progress. Cultural and structural issues must be fixed. Unconscious biases and discrimination are rampant even in highly-esteemed organizations. Establish fair and transparent human resource policies.
Six, get involved in local communities to engage them. As Michael Porter said, it is not possible for businesses to sustain long-term shareholder value without ensuring the welfare of the communities they exist in. It is in the best interest of enterprises to engage with local communities to understand and work towards lowering cultural and other barriers in society. It will also help connect with potential customers, employees and special interest groups driving the gender-equity agenda and achieve better diversity.