India Splits Comms and IT Ministries, Names New Telecoms Head

Manoj Sinha becomes India's new telecoms minister after Modi shuffles jobs, moving Ravi Shankar Prasad to law ministry.

Indian prime minister Narendra Modi on Tuesday shuffled his ministers, in the process splitting the communications and IT ministry and appointing a new custodian of the telecoms portfolio.

Former telecoms and IT minister Ravi Shankar Prasad takes up a new post as law and justice minister, as well as retaining control of electronics and information technology.

Meanwhile, railways minister Manoj Sinha takes on communications, in addition to his existing role.

The change comes at a pivotal time for India's telecoms sector.

Six weeks ago Prasad approved plans for a massive multi-band spectrum auction to take place in the coming months. If all the available frequencies sell, the process could raise 5.6 trillion rupees (€74 billion) for government coffers, however this week analysts predicted that the actual sum generated from the sale will be significantly lower as telcos choose carefully which frequencies to bid on.

Nonetheless, Crisil Research still estimated that the auction will rise around INR1 trillion (€13.3 billion), which is no small sum.

The auction will take place against a backdrop of change in the market, with many telcos looking either to bulk up in advance of the planned launch of Reliance Jio's Infocomm's nationwide 4G service, or sell out as the competition heats up.

Reliance Communications and Aircel are working on a merger deal that will create the third largest player by customers in the Indian mobile market, while Bharti Airtel recently closed the acquisition of small operator Videocon's 1800-MHz spectrum in six circles.

A fortnight ago Japan's NTT DoCoMo revealed that a U.K. arbitration court ruled in its favour regarding its exit from the Indian mobile operator joint venture it shares with Tata Sons, ordering the latter to pay US$1.172 billion in damages for breach of the pair's shareholder agreement with regard to Tata Teleservices Ltd, known as Tata DoCoMo.

Last year there was talk of Tata exiting the Indian mobile market altogether, and more recently there have been similar rumours regarding Telenor, which arguably lacks the scale to compete effectively going forward.