Airtel is indispensable to India's digital infrastructure! Could AGR penalty hamper its digital R&D activities?

The last three weeks have been crazy for globally-acclaimed telcos like Airtel and Vodafone Idea. A penalty of Rs 92,000 crores towards the IUC and AGR matters are going to eat a significant portion of their monetary assets.

Airtel and Vodafone Idea together are the backbone of India's digital infrastructure. Those tracking the industry would know for sure that Airtel has several innovations to its credit that has contributed to India's digital technology progress.

Rajan S Mathews, Director General, COAI, had also opined that the taxes and levies in the Indian telecom sector, ranging from 29% to 32%, are one of the highest globally. He said that the Supreme Court’s judgment is the last straw in contributing to financial distress and it remains to be seen whether the industry will be able to recover from this setback. According to him this immense financial pressure on the sector will also adversely impact Digital India rollout.

Airtel is one significant contributor to India's Digital India plans. Recently, at the India Mobile Congress (IMC) 2019, Airtel proved its innovation prowess.

For Airtel, this year’s theme at the IMC 2019 was “Powering Smart Businesses” and the company showcased a range of innovative solutions for smart businesses, to meet the emerging needs of enterprises in a fast-evolving digital economy powered by IoT, Artificial Intelligence and deep analytics.

Airtel showcased multiple use cases under Smart Cities, Smart Experiences, connected mobility, Industry 4.0, IoT, 5G and next-gen cloud and data center.

Airtel also demonstrated a LIVE 5G network along with a wide range of use cases and applications that leverage 5G and pre-5G network technologies. The attractions at Airtel booth drew the visitors to its immersive cloud-based gaming experience between multiple users over ultra-fast low latency Airtel 5G; virtual trials of different fashion outfits in real-time using high speed-low latency networks; NB-IoT based sensor’s using high speeds to monitor air pollution levels. Airtel also showcased connected automobiles such as MG Motor Hector, which is powered by Airtel’s 5G ready connectivity suite.

Airtel also showcased a 5G-powered 'connected music’ performance in partnership with Ericsson at the IMC 2019. The demonstration involved connecting two parts of a musical performance using a live 5G network and presenting it as one, for live audiences at both locations. This initiative was taken to showcase the ultra-low latency of the 5G network and to highlight how 5G can transform user interaction with the arts and opens new opportunities for industries.

These were probably just a bird's eye view over their innovations that can place India globally on par with other digitally advanced countries. Back in its R&D labs, incubators, maker spaces, and financially-aided startups several advanced technology-based solutions -  exploiting AI, ML, VR  - are all in the making that can make our lives easy and technologically advanced.

Certainly, all this innovation and R&D requires monetary allocation. Considering that Airtel may have a contingency plan for the penalty payout, divesting approximately Rs 45,000 crores of money in the next 3 months could possibly hamper several of its ambitious projects, which in turn could affect Digital India. Projects could possibly be stalled due to paucity of immediate funds that can be routed for paying the penalty amount that in turn could also affect could have serious consequences on employment opportunities for aspiring graduates.

It is therefore in the belief that the Ministry, DoT, TRAI and other key associations could act in concert to work on a coordinated plan that can help innovation rich companies like Airtel and Vodafone Idea manage its penalty payout, which can possibly have the least impact on their innovation capabilities and its association with Digital India plans.