ICICI seeks sops from DoT

NEW DELHI, January 27: Tariff restrictions for cellular services by way of monthly rental ceiling should be removed. Apart from this, a comprehensive interconnect agreement should be evolved which should include sharing of revenue in respect of calls originating from the DoT network on account of cellular services. Automatic extension of licence period by one or more term provided the licensee meets licence conditions. These are some of the issues raised by the ICICI which is the nodal financial institution for channelising the funding of telecom projects in the country.

The ICICI report is being considered important as it has strived to give a comprehensive picture of the fund requirements for the infrastructure sector, especially the telecom sector. The ICICI report was presented to the RBI and top bureaucrats of infrastructure ministries last week. It has put the total funding requirement for the telecom sector at Rs 45,000 crore. Of this, Rs 25,000 crore is estimated to be the total debt funding. The report clearly states that domestic financial institutions are capable of funding only 30 per cent of the sector’s requirements while the remain if 70% will have to come from overseas – nearly $ 4.5 billion.

Even for the 30 per cent funding by Indian financial institutions, ICICI has laid down several preconditions critical to impacting the viability of telecom projects. Foremost among these is the issue of licence fee for metro cellular operators will be Rs 500 per subscriber per month from October, 1998. The ICICI report points out that currently 70 per cent of the subscribers contribute monthly revenues below the threshold level of Rs 500.

The report says removal of ceiling will ensure minimum revenue per subscriber adequate to cover the fixed costs at least.