Letter by Shri E A S Sarma, Former Secretary to the Government of India, Visakhapatnam
26/10/2024
To
Dr. Neeraj Mittal
Secretary
Department of Telecommunications (DOT)
Government of India
Dear Dr Mittal,
I refer to the latest notification of October 21st, 2024 issued by DOT (https://dot.gov.in/sites/default/files/PPP-PMI%20order%2021102024.pdf),
amending the Public Procurement (Preference to Make in India) Order 2017, which has the following stipulation:
“This Notification shall be applicable in respect of the procurement made by all attached or subordinate offices or autonomous bodies under the Government of India including Government Companies as defined in the Companies Act, and/or the States and Local Bodies making procurement under all Central Schemes/ Central Sector Schemes where the Scheme is fully or partially funded by the Government of India. This Notification shall also be applicable in respect of projects wherein funding of goods, services or works is by the Digital Bharat Nidhi to the extent of having been awarded through bids.”
The above stipulation implies that a CPSE like BSNL would have to procure 5G related equipment with a minimum local content, exclusively from local manufacturing companies and from companies which are beneficiaries of government subsidies under the PLI scheme. The list of such PLI beneficiaries notified by DOT includes companies such as Nokia (https://dot.gov.in/sites/default/files/List%20of%20PLI%20companies-%20Deemed%20Class%20II%20for%20PPP-MII%20order_0.pdf).
In my view, the above cited notification places BSNL at a disadvantage vis-a-vis its private competitors, who enjoy the freedom to import 5G equipment without any restriction.
In recent times, the series of moves made by your Department, seem to aim at weakening BSNL versus its private competitors on the one hand and reduce competition among private operators, granting them undue benefits to allow them to profiteer at the cost of customers. The latest move seems to be a part of that effort.
In this connection, I would invite your attention to a statement issued on October 3 2024 by some of us forming part of a civil society organisation, People’s Commission on Public Sector and Public Services on the need to strengthen BSNL/MTNL and the need to regulate private telecom operators to safeguard public interest. In particular, our statement stated as follows:
“Had BSNL been allowed to function on a level playing ground vis¬ a¬ vis its competitors in the matter of upgradation of technology and entry into 4G and 5G spectrum ranges¬ it would not only have played its expected premier role in the telecom sector but also offered strong competition to private players and forced them to deliver telecom services of high quality at affordable tariffs to customers
(accessible at https://aifap.org.in/wp-content/uploads/2024/10/Upload.PCPSPS-Statement-on-BSNL-and-MTNL.pdf)
I feel that strengthening BSNL, MTNL and other public sector telecom entities is necessary, not only for promoting self-reliance in the telecom sector but also for forcing private operators to be subject to competition and forcing them to offer affordable tariffs, subject to reasonable standards of efficiency and quality of service.
In this connection, I refer to my letter of 17th October 2024 (https://countercurrents.org/2024/10/elon-musk-and-satellite-spectrum-allocation-dot-should-earmark-satellite-spectrum-for-strategic-uses-respect-apex-courts-judgement-in-2g-spectrum-case/) in which I expressed my anguish at the deliberate manner in which your Department reduced 4G spectrum/ 5G spectrum auctions to a farce, allowing a few private oligarchs to capture highly precious, strategic bands of spectrum at low prices, how your Department acquiesced in those very same companies unilaterally hiking up tariffs and pocketing thousands of crores of rupees of profits at the cost of milions of helpless customers and, more recently, caving in unceremoniously to Elon Musk’s pressure to subject satellite spectrum to administrative allocation, in contempt of the apex court’s directions in the 2G spectrum case.
It is ironic that foreign players should dictate India’s domestic telecom policy!
Against the above background, I request DOT to maintain a totally level-playing ground between CPSE telecom companies and private telecom operators, subject the latter to the strictest norms of competition, and when there is no adequate competition, subject their tariffs to rigorous regulation to safeguard the interests of customers and insulate domestic telecom policy decisions from intrusive influence of foreign and private domestic players.
As an immediate measure, DOT should either extend the latest public procurement policy to apply to private telecom operators and, if it is not possible, allow telecom CPSEs to operate on a level-playing ground vis-a-vis their private competitors.
I may add that public subsidies to private manufacturing units under the PLI scheme in the telecom sector in itself tend to place a few companies at an undue advantage vis-a-vis other companies and, from that point of view, the PLI scheme is a regressive one, calling for urgent need to revisit it altogether. There are better and more prudent ways to incentivise an increase in domestic manufacturing activity.
Regards,
Yours sincerely,
E A S Sarma
Former Secretary to the Government of India
Visakhapatnam