NEWS &
VIEWS TODAY
24th,MAY,2012
TELECOM SPECTRUM TANGLE
VIEWS - SUMMARY
1. Limit No. Of operators to 5-8
2. Adopt Revenue Sharing
3. ENSURE BSNL, MTNL survive
1. NEWS :-Commerce
Minister Anand Sharma has opposed TRAI’s proposals on Spectrum pricing and has
written to the Finance Minister very clearly about it. Leading GSM Operators
have already severely criticized the TRAI proposals as “flawed, retrograde and
regressive”. The proposals of TRAI will result in 100% increase in call Rates. Shri
Anand Sharma has said, the proposals would result in mobile companies losing over Rs.1 lakh
Crores.
VIEWS :-
One of the Best regulators anywhere in the world – prior to this recommendation
– was TRAI. Most of TRAI’s earlier recommendations enhanced the effectiveness
of the Telecom Industry in expanding to the nooks and corners of India, keeping
the TARIFFS at the world’s LOWEST levels.
But, thanks to
the mindless expansion of competition introduced by Shri A.Raja in particular,
and of course, there too, TRAI’s proposals were not that good, the telecom
Industry players lost their profitability levels to the bottom-most levels, hovering
very close to losses or actually incurring losses. Even as of today, none of
the Telecom Players in India are anywhere near sound profitability levels,
which can enable them to expand their networks and upgrade their Technologies.
If they are still surviving and growing, it is because, these players have deep
pockets to sustain at current levels of LOW PROFITABILITY/ LOSSES.
In my view, it
is suicidal to expand competition from existing levels. Government must find
ways to limit the competition to existing players. I do not think anywhere in
the world, there are more players.
Simply because,
there are 1000 people willing to enter the Indian telecom sector, will you
allow all of them entry into it – at some level of spectrum / licence fees? The
number 1000 must be looking ridiculous, isn’t it? It is ridiculous. Likewise, a
hundred players in India is equally ridiculous. Even 25 players in each state
of India is equally ridiculous. About
6-8 is the utmost, the optimum that the telecom sector needs to have and can
bear comfortably. Right now, I am looking at about 6 towers from my house, very
near to each other – just looking ridiculous by their proximity. There were so
many small birds in the vicinity before. But, now they are no more there. What
is happening seems to be nobody’s concern. Are the human beings in any risk by
such close proximity of so many of these towers? Every Operator claims that
their tower by itself is within safe limits (which itself is in doubt). But,
putting them all together, their combined emissions – are they in safe zone
still for us? Who will ensure that? TRAI
must look into this aspect quickly. It has relevance to all future Telecom
Planning.
Now, Mr.A.Raja
wanted many more such towers all around us, with many more operators coming in,
fighting among themselves – and perishing ultimately. That would be their fate ;
100 people cannot eat the same Bread – and expect to survive. Leave aside the
fate of the operators; With so many more towers to come up all around us, what
is our fate? Who will tell that? Who will assure that?
Enhancing Government
revenue and bridging the budget deficit– seems to be the only concern today.
The immediate
fall out will be that - many existing private telecom operators will run out of
their money immediately – BSNL and MTNL have no money to pay for these spectrum
fees proposed by TRAI any way – and the payment of the spectrum fees by private
operators – will not guarantee efficient usage of spectrum thereafter.
The second
impact will be – from a very efficient, VERY LOW COST telecom service as of
today – India will immediately become very inefficient, very High Cost telecom
service in the world.
From world’s
LOWEST PRICED SERVICE to the world’s HIGHEST PRICED SERVICE ! A
phenomenal change overnight.
Why is this
sudden change in TRAI? I suspect TRAI is
also afraid of what CAG or courts may say later. I don’t think, such a feeling
is warranted. TRAI is neither an EARNER
nor a SPENDER – but just a RECOMMENDER. It gives EXPERT ADVICE. CAG has
absolutely no jurisdiction to criticize ADVICES given by EXPERTS in Regulatory
Authorities. CAG is not the EXPERT
chosen to ADVICE. CAG’s jurisdiction is limited to the EARNERS/SPENDERS
(Plus their internal IFAs) and not to external advisers/recommenders. So,
regulatory authorities must not feel constrained by CAG, who has his duty
neatly cut out.
Courts can find
fault with an advice which is obviously flawed, which is accepted by Government
with all those flaws and implemented to the detriment of the Industry or the
consumers. Even in such a case, Courts find fault with Government – not with
the regulator, whose OPINION, is just an opinion, and not binding.
So, what should
the Government be doing? It must have its vision very clear, to start with.
(i)
India must have efficient but low cost telecom
services, affordable for the maximum number of people. That is what India has
achieved so far – thanks to TRAI, DOT and Government. But, for God’s sake, please
do not upset this beautiful apple cart, merely because a coalition partner
minister has created so many problems because of which, CAG and the courts are
now breathing down on these decisions. Telecom will go the way of Airlines
overnight, if Government accepts TRAI’s latest recommendations. The Minister,
Sri Anand Sharma is absolutely right in what he said.
(ii)
Secondly, Please decide on how many operators in
each circle – are enough. Please do take into account the number of towers that
would be emitting these waves all around the people. Already, there are too
many of them. There is really no need for more – merely because, Government
wants to Auction the spectrum to whoever is willing to pay. You must have an
optimum number in mind – keeping public health in mind. We want to survive and
be sane – before we can talk on these mobiles. No studies are being done at all
on the combined effect of these towers in so close proximity.
(iii)
Forget the Budget deficit – which is a temporary
phenomenon any way. Why not a revenue sharing method, which brings in long term
revenues, without hurting the telecom operators. Even BSNL and MTNL can still
survive and implement these new technologies, if it is REVENUE SHARING – Not if
it is to be the type of Auction being proposed by Government and TRAI. I do not
think, CAG or Courts can object if it is REVENUE SHARING. If needed, Government
can take the opinion of CAG and the courts as well on this further.
(iv)
Government has an investment of around Rs.1 lakh
crores in its PSUs, BSNL and MTNL, after many years of LOW INVESTMENT, and high
depreciation. BSNL and MTNL still have a huge public purpose. There are many
remote places, where still BSNL is the main / sole operator, which Government
can command to put up telecom services. Government must aim to keep its PSUs
afloat and efficient. The latest recommendations of TRAI will certainly keep
BSNL and MTNL out of the Auction – they just don’t have the cash resources to
pay such huge spectrum fees any more. They are still employing 3 lakh people.
Government has not been creating many Jobs; it should at least not do away with
existing employment of this order, so suddenly by denying BSNL and MTNL the
opportunity to EXIST. It is now RIGHT TO LIFE -
for these PSUs.
(v)
So, I suggest three parameters – (i) Limit
number of operators to 6-8 maximum. Beyond this, it does not look good for
Public Health. (ii) Make the criterion
Revenue sharing.(iii) Ensure that Government’s (Public) own investment of over
Rs.1 lakh Crores in BSNL and MTNL starts
yielding some good return as in the years before and they do serve public
purpose.
(vi)
If the VISION
is clear, the PATH is clear.
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