Rajan Mathews, director general of the cellcos‘ trade body COAI (Cellular Operators Association of India), said the situation was worsened because members were not free to shop around freely for foreign equipment.
He told local reporters that orders for telecoms equipment have “come to a screeching halt” after the government made it mandatory for operators to go through a complex pre-approval process to buy any imported kit.
The Indian government wants to make the country more self-sufficient in key infrastructure by restricting imports, and also cites security concerns, but the homegrown industry is inadequate to meet operators‘ needs.
All these factors are limiting cellcos‘ ability to support new users and squeezing revenue growth. Mathews complained that foreign direct investment as well as local bank lending have almost dried up, making liquidity “a big issue” for operators.