No Move To Cap Number Of Players: Raja

[Honest 836]

No move to cap number of players: Raja

Business Standard l 21 Nov l New Delhi

The government today ruled out limiting the number of operators in a circle and said that any such decision would need to be reverted back to telecom regulator Telecommunications Regulatory Authority of India (Trai).

The Department of Telecommunications (DoT) has so far considered applications for telecom licences that were received till September 25, 2007, and is yet to take a decision on those that came between September 25 and October 1. This had led to widespread speculation that the applications after September 26 would not be taken up at all and there would be a cap in that sense.

Speculation got reinforced because of the scarcity of spectrum and there being about 12 players in circles (once new telcos start operations), which offers sufficient competition.

"We have not taken such a decision.... I don't think the Telecom Commission has taken such a decision (either). If at all, it again has to be referred to Trai. I never asked the Commission to deliberate on the issue," Telecom Minister A Raja said.

The DoT had received 575 applications, of which 343 were filed between September 26 and the cutoff date of October 1, 2007.

There were 24 applicants in this period including AT&T, DLF, Moser Baer, Ispat, and Sterlite. A total of 46 companies had applied for telecom licences.

Licences are given on a first-come-first-served basis.

[Honest 836]

Call rates may fall after new telcos start: Raja

Business Standard l 21 Nov l New Delhi

Telecom minister A Raja feels there is enough scope for tariffs to come down to a level of 20 paise per minute for local calls and 50 paise per minute for STD calls after new operators start services.

“There is a scope for reduction once the new operators start rolling out (services). Tariffs for intra circle calls may come down to 20-25 paise and national calls may come down to 40-50 paise,” Raja said here. The minister also said the country needs another 300 million telephone lines, which can be given by both existing and new operators.

There is a large scope for business to reach 750 million phone connections. There are 120 new licensees who have been allowed by the DoT to start telecom services. Unitech, Swan, Datacom and Shyam Telecom have already got spectrum and could start services once they get the network ready.

Raja said Telecom Regulatory Authority of India has been following a practice of forbearance. As per this, tariffs are determined by market forces and are not fixed by the regulator.

Justifying the presence of more players in a competitive market, the minister said, “We brought in a competitive atmosphere and that will bring down the tariffs. Is it not the responsibility of the government to introduce more competition?” At present local call rates vary from 40 paise (within an operator’s own network) to Re 1, and national call rates from Re 1 to Rs 2.65 a minute.