However, to attract more global investors to this sector, more clarity on policies like M&A norms is required, he added.
Meanwhile, speaking about the upcoming spectrum auctions, he said that 1800 MHz band auction may not interest participants much, but investors are likely to show interest in 900 MHz band auction.
Below is the verbatim transcript of Sanjay Kapoor's interview with CNBC-TV18
Q: As an industry observer just want to get your reaction to this decision from the FIPB. What does it mean for the market as a whole?
A: Very categorically winds have started blowing in the right direction for the telecom. A little while back we have had some positive news from the regulatory action. Now we are getting a FIPB approval for Vodafone. This is all positive. We are at a very interesting juncture as far as telecommunications is concerned. We are transforming. From being a voice led industry to becoming a data led industry.
We know in a country like ours where the physical infrastructure happens to be weak even today, the virtual infrastructure which is atleast the voice network has been absolutely benchmarked with the best in the world. Now we are transforming that voice based network to a data based network, which will require huge amounts of investments to be made. I don't believe that only local pockets will be able to bridge the gap. Therefore this approval is coming at a very apt juncture.
While I say that, I also must say that it is not just giving an approval for FDI that will attract the investors. When we speak to investors in any part of the world we clearly see that what they don't like is uncertainty. They like clarity and therefore the sooner we come out clarification on the policies whether they are mergers or they are sharing of spectrum or renewal of the licenses going forward, all these need to be set to rest. This push by FDI is definitely a welcome move for India because India needs a lot of investment.
When you look at the telecom industry in other parts of the world, they are very data centric for example Japan, Korea and United States. Billions of dollars are being invested to create a very robust data network because we all know that countries in future will not compete only on their physical infrastructure but a mix of physical and virtual infrastructure. Therefore this is a golden opportunity for India to render itself to be globally competitive.
Q: You seem to be stressing on the fact that the industry is moving from being voice based to data led. How do you see the data market now panning out? Do you see Vodafone coming in with guns blazing specifically in that space? Do you see more aggressive tariffs because of this move?
A: I have always believed that no one company can create an eco-system that can transform the services in a nation. It is not about one company. The whole industry will have to take a significant step towards transforming their businesses towards data centric businesses.
India is capable of doing, but it requires a huge amount of investment both in access and in backhaul. Telecommunications is a spectrum hungry industry. With abundance of spectrum, with backhaul clubbed with devices, which are flowing heavily into this country everyday and content, we can have a major transformation from voice to data. We know that India has a privilege of having 50 percent of its population below the age group of 26 which makes it one of the most potent data markets in the world.
Q: Do you now see other companies with significant foreign interest going in for a similar move to hike stake here in India and if so who would be your suspects?
A: India will remain a market that everybody will look at positively, provided we are able to set the stage with certainty behind us and with complete clarity on how we are going to transform this country from voice to data going forward. Once most of these policy decisions are taken I have no doubt in my mind that India will once again have the potential of becoming attractive to many foreign investors.
Q: How do you see the sector as a whole panning out? Do you see the spectrum auctions coming up as a success now that some policy clarity has started emerging? Do you see Vodafone for example participating more aggressively in the auctions?
A: When you look at the forthcoming auctions, as far as 1800 Mhz spectrum is concerned there is enough spectrum available and I don't see that there will be too much of a fight going on over there. What will be keenly poised is the space for 900 Mhz spectrum because we know that 900 Mhz is a very powerful set of spectrum. With the dearth of spectrum in that band and there are lot more takers, it will be interesting to watch how that pans out.
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