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Journalism of Courage
It would be premature to calculate the benefits of telecom deregulation just yet. Take the cellular sector for instance. The hype that India has been amongst the fastest growing cellular markets in the world has been lulled by the reality of high projections versus low actuals.
In spite of growth in subscriber base at the rate of about 32,000 subscribers in the four metros per month, the actual airtime usage has approximated lower than 50-60 per cent of the initially optimistic projections.
The internal housekeeping of the operators too needs improvement. Managing growth in subscribers numbers and ensuring sound credit control measures is a balancing trick that all operators needto master.
Though telecom fraud has not yet reached the Indian shores, bad debt levels are not too insignificant, caused due to an almost incessant focus on increasing customer numbers, and a rather low focus on the quot;mundanequot; credit control and recovery issues. With India sharing socio-economic factors and demographics with South Asian economies, where recent frauds in some cases have caused up to one third of subscriber numbers being wiped out, the threat of frauds looms not too far away. The effect of such instances in our present scenario is rather too horrific to be ignored.
With the intense pressure on profits, operators are now almost clutching at straws for some succor. The first area of their focus is the not too clearly worded license agreement, with significant scope for quot;interpretationsquot;. These ambiguities have enabled operators to levy additional charges per month, like the Caller Line Identification or the subscription charges as a part of various billing packages, far above the License capof Rs 156 monthly rental.
DoT appears to have indirectly endorsed the operators stand at least on Caller Line Identification, by actually demanding a share of this cake. In case of non metro circles the operator is charging long distance connectivity charges for intra-circle city to city connectivity, though at a discount as compared similar DoT charges, exploiting ambiguity in the license agreement. On payment of Wireless Planning and Co-ordination Fees for usage of GSM and Microwave Links, the operators are attempting beneficial interpretations of formulae used for computation, be it relating to subscriber count or number of transmitting stations.
On the flip side, government agencies are asking for their pound of flesh, viz. the Ministry of Surface Transport demanding from operators for laying cables for landline connections at a rate. The cumulative effect of all these ambiguities is significant.
The boon of interpretive8217; agreements has however, been somewhat offset by the bane of financialdifficulties. The recent highly priced sellouts in the industry while demonstrating the path that the local partner wants to follow, have only further added to the industry8217;s woes.
Clearly apprehensions are many. Only the committed resolve of a strategic telecom investor and a responsive regulator may dispel doubts in the days ahead.
The author is the head of telecom at Price Waterhouse Associates.
