ICICI to study cell industry woes

NEW DELHI, April 13: In a swift move, the Department of Telecommunications (DoT) has handed over the evaluation of the financial problems be...

NEW DELHI, April 13: In a swift move, the Department of Telecommunications (DoT) has handed over the evaluation of the financial problems being faced by private cellular operators to ICICI. The overnight decision to handover the study to ICICI was taken after the Bureau of Industrial Costs and Prices (BICP), which was earlier entrusted with the task, expressed its inability to give the recommendations without carrying out a complete study of the telecom sector.

The BICP is learnt to have informed the DoT that any evaluation of the cellular industry could be done by it only after obtaining detailed information about the entire telecom sector. This, according to the BICP, would take at least four to five months. The DoT, pressurised by the cellular operators for an early redressal of their demands, has therefore turned to ICICI for conducting the study now.

The move has raised eyebrows as BICP had originally been roped in to give an unbiased view of the financial problems being faced by private cellularoperators so the government could take a decision on the pending demands of operators who had sought an extension of the licence period from 10 to 15 years and a three year moratorium in paying their annual licence fees.

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Experts however feel that as ICICI has been approached by private companies for funding their projects, it may be more sympathetic to the industry’s problems. In fact some experts even claim that the industry lobby may have pressurised the DoT to involve ICICI in the study.

ICICI had made a presentation in January this year clearly stating the present tender conditons for cellular operators was loaded against them and that the the terms would have to be more attractive to attract funding from FIs.

The ICICI had recommended that the government should consider automatic extension of the licence period for cellular operators from 10 to 15 years. It also recommended that the DoT should refrain from entering the field of cellular service at least for five years. With the ICICIrecommendations already before the DoT, it is surprising that the DoT has approached the ICICI rather than waiting for an unbiased evaluation by the BICP.