25, జనవరి 2012, బుధవారం

On some policy issues in Indian Tlecom Sector


The heads of the private telecom services companies Sunil Mittal (Airtel), Anil Ambani(Reliance), Marten Pieters(Vodafone), and Himanshu Kapania(Idea) met Communications Minister Kapil Sibal on 24-1-2012 to discuss their concerns with him. On the same day they also met the TRAI Chairman.
 (They earlier met the Communications Minister and the Prime Minister on 30-11-2011).

They told the Minister that the proposed changes in the telecom policy would impact them adversely and hence the Minister should intervene to make the policy more favourable to them. What are the issues on which the private telecom operators want to be favoured?

a)      They are having 2G spectrum with them beyond 6.2 MHz. The TRAI recommended that for the spectrum held by them over and above this 6.2 MHz, they should pay the fee to the Government. It is estimated that the amount they have to pay thus would be Rs 17000 crores. They want that this payment should not be there.

b)      Similarly, the new entries in GSM services among the old operators like Tata are demanding that the new entrants should not be asked to pay for the spectrum held by them upto 6.2 MHz since the old entrants were not asked to pay upto 6.2 MHz(The Telecom Commission recently approved the proposal that the old operators  of GSM services  have to pay for the spectrum beyond 6.2 MHz and the new entrants in GSM services have to pay for the spectrum beyond 4.4 MHz held by them)

c)      There are 14 telecom operators at present. Some of them do not have sustainable business and want to exit. Some of them want to merge.  Some of them want to acquire the companies that want to exit. Thus they want merger, acquisition and exit policy. They want that the policy for mergers, acquisitions and exits should made favourable for them. It appears that the Goveernment is in their favour in this regard. The Telecom Commission already approved the proposal as per which the merged entity can ahve a market share upto 35% without the recommendation of TRAI and upto 60% with the recommendation of TRAI. If a company is allowed to have the market share of 35%, it will lead to monopoly resulting in higher tariffs and poor service to the customer. If it is upto 60%, the troubles to customers will increase further.

d)      At present the telecom operators are paying 6%, 8% and 10% of their revenue to the Government as licence fee. The TRAI recommended for a uniform licence fee of 8% on revenue and it was approved by the Telecom Commission. The private telecom operators are demanding for reducing this uniform licence fee to 6%.

e)      At present the banks are not giving loans to the telecom operators in view of the uncertainities arisen due to the 2G spectrum scam. The private operators are demanding the Governmnet to issue a directive to the banks to give loans to them.

f)       They demand that the spectrum purchased by them from the Government in the auction should be allowed to be shared with other operators who are having shortage of spectrum and also they be allowed to trade with the spectrum purchased by them. The draft telecom policy, which is to be finalised, is in favour of this demand.

It is to be noted that the Telecom Commission’s decisions have to be approved by the Minister and then by the Cabinet and hence the private telecom operators have started again to pressurize the Government to bring the policy changes completely in their favour, although the Government also is inclined in their favour.

Thus the private operators demand that all their wrong doings in the past be condoned and the Government should help them to have profitable business in telecom services, without any fulfilling of social responsibility and obligation.





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