India Telecom

November 8, 2002
Mahajan promises "re-think" on revenue share, license fees

NEW DELHI -- Union Infocom Minister Pramod Mahajan has promised the telecom operators a "re-think" on part of the government regarding the revenue share, spectrum charges and license fees that they have to pay.

The cellular operators themselves have been trying to improve sustainability in context of the intense competition, among them, reducing tariffs for customers. The Cellular Operators Association of India (COAI) has further claimed that independent studies have pointed out that cellular tariffs in India are the lowest in the world.

The Minister was officially launching the cellular service of the fourth mobile operator in Delhi, Tata-Birla-AT&T with the brand name "Idea". The Rs 500-crore venture covers Delhi and the National Capital Region (NCR) in one go and claims superior quality of service (QoS) and a variety of services on prepaid and postpaid platforms. Significantly, Himanshu Kapania, Idea Cellular’s Chief Operating Officer, said that as the last to arrive on the Delhi scene, the fourth operator will not be depending so much on reduced tariff but on better QoS and wide variety of products to maintain an edge over rivals.

While Mahajan’s emphasis on the sustainability of cellular and basic service operators in an environment of the lowest ever tariffs should warm the industry’s hope of a reduction in revenue share, his public utterance at poor QoS debunks the operators claim that they have world class networks on the job. "I get dropped calls or there is an inability to contact in certain buildings and other problems with existing cellular phones," he said and hoped that Idea Cellular would be able to provide hassle-free services. Many of the services offered by the other cellular operators needed too many dialing turns and customers were stuck on that, he added. "Idea Cellular should be the benchmark for service in Delhi," he added.

The telcos were not efficient in the utilization of the spectrum either, the Minister charged. While in China they were serving four million customers per MHz spectrum capacity, "here it is not even one-tenth," he said. Idea Cellular has the 1,800MHz band as against the 800MHz band given to the existing cellular operators. Therefore, customers should be able to use dual-band handsets to receive signals.

Idea Cellular has claimed that it has the first 3G compatible, EDGE upgradable network. It is already GPRS capable with MMS as its specific offering which none of the other operators is providing. It is also the first to offer multiple tariff plans on prepaid with full roaming to seven states on prepaid.

Questioned about the economics of 2.5G in Delhi in the context of the poor response of customers to GPRS in Mumbai, Kapania was emphatic that Idea Cellular’s 40Kbps data service would be more attractive to customers than what the Mumbai operators were providing.

The incumbent cellular operators in Delhi are already planning to upgrade their services to 2.5G. The 3G compatibility of the new arrival is no threat to them right now, as no one is sure whether customers would be willing to pay for even 2.5G services in Delhi. Nokia has provided the network for Idea Cellular in Delhi and SchlumbergerSema has provided the billing system.