Telecom prospects robust; stress a temporary situation: Govt

New Delhi: The government on Friday asserted that the telecom sector's prospects remain "robust" in the medium and long term due to a vibrant market and termed the current stress in the industry as a "temporary phenomenon".

Speaking at the India Economic Summit here, Telecom Secretary Aruna Sundararajan said the government is fully cognisant of its role to provide an enabling environment and level playing field, but the market developments would require businesses to take their own decisions.

"As long as we respect the market, and rules of the market, and the government respects where we need to lay down the rules of the game, I think we have enough space for everyone to grow," she said.

The telecom sector has been under severe financial strain and the difficulties of operators compounded by the unrestrained tariff war. The sector has a cumulative debt of over Rs 4.6 lakh crore.

An inter-ministerial group (IMG) was constituted earlier this year to recommend measures to mitigate the financial woes and its report was placed before the Telecom Commission.

The Telecom Commission -- the apex decision-making body at the telecom department -- last week approved IMG's recommendation on giving more time (16 years) to telecom companies to pay for the spectrum they bought in auctions, as against 10 years which is the current norm.

The Commission also approved IMG's suggestion of lowering interest rate charged over penalties imposed on service providers.

"Government is very aware that we need to provide an enabling environment and level playing field. Beyond that what happens in the market, that is a call for the market players to take," Sundararajan said.

To a specific query on the distress in the telecom sector Sundararajan said, the current situation is "firmly a temporary phenomenon".

She cited the data explosion in India, which is the second largest telecom market in the world with over a billion subscribers, and said that the market had not even scratched the surface in terms of its full data potential.

"We still have to do 80 percent more...We have not even begun to scratch the surface of data...Data explosion has just begun. So, I think there is a lot more to be done," she added.

India is a "vibrant and robust market" and its medium and long term prospects remain very robust, she added.