ICT needs governance
A golden goose needs some taking care of. Or it may fall sick. The Information and Communication Technologies (ICT) industry, whose contribution to the exchequer is about Rs150 billion per annum, is apparently running on an auto-pilot mode. That charge is not specific to this government, however. The PPP government (2008-13) to a large extent, and later the PML-N government (2013-18) to some degree, also let this multi-billion-dollar industry twist in the wind. Except for the times when they needed fiscal injections in the form of lucrative spectrum auctions.
Several matters remain pending, something that can be traced to gradually diminishing capacity to govern this important industry. On one hand, the Ministry of IT & Telecom, the custodian, is running at suboptimal pace, as key posts lay vacant in the middle. Then there is the bureaucrats’ fear of being “nabbed”, even for routine decisions, which may be adding to dysfunction. Government neglect, it seems, is also at work.
The most immediate issue at hand is that of license renewal, which is due this year for three cellular companies. (For more on this impasse, read: “On telco’s license renewal,” published March 19, 2019). It shouldn’t have taken this long to renew a basic thing like a license, but the renewal mechanism, which is said to be fixated on the price-tag of renewal, is yet to be decided by the government. Meanwhile, the affected companies face uncertainty over cost of renewal, which affects capital spending decisions.
The next pressing matter is fiscal incentives. With the budget coming up, operators are again expected to make the case for tax reduction on mobile devices and usage, relaxation in import duties on telecom equipment, and abolishing of provincial broadband tax. But given the fiscal squeeze, government may be unable to offer major relief. Let’s see if the PM’s taskforce on IT & Telecom, which is expected to discuss budgetary measures once license renewal process is over, can get the attention of PM and his core team
In the medium term, issues like operational difficulties in laying down fiber-optic network – the backbone of digital economy – need to be resolved. Also lingering is the issue of making adequate spectrum available to operators so they can expand their networks and improve quality of service. For too long, inefficient spectrum management on part of the government has led to operators having to pay artificially-high prices whenever a spectrum auction randomly takes place. If, as reported, the government ends up clubbing the pending license renewal with another spectrum auction, it will strap the operators further.
In the long run, the development of digital economy is of great importance. Yet, the current government, like its predecessor, has not shown the intent to develop a comprehensive regulatory framework for online intermediaries in segments like online shopping, ride hailing, and classifieds/information platforms.
It seems that consumers are on their own even as the digital economy develops in a haphazard manner.
While the MoIT needs to up it game, the PTA, which is now operating with a full-time chairman, must also ensure that existing regulations are adhered to by the operators in the interest of market development and consumer protection. The government needs to proactively govern this modernizing industry, which has immense potential for job creation. ICT needs a champion within the government (preferably PM himself) for effective governance, which includes a forward-looking policy focus.