India Telecom

September 6, 2002
Private telcos get tough message from Mahajan

NEW DELHI -- Union Communications & IT Minister Pramod Mahajan sent out a tough message to private telecom operators today: he might consider licensing any number of cellular phone operators beyond the present ceiling of four per telecom circle, if they are willing to pay the same license fees that the existing operators did.

Speaking at a function where the Pacific Telecom Council (PTC) India Foundation chairman Dr. Bhaskar Rao gave him the Foundation's first award as the "Telecom Man of the Year," Mahajan rejected the plea for intervention to moderate the competitive power of the incumbent government owned telco Bharat Sanchar Nigam Ltd (BSNL). "BSNL will neither be a big brother or an elder brother " to the private sector telcos, the Minister declared. "Government companies BSNL and MTNL will not be a parivar(family member), but competitors," he emphasized.

The message is considered tough in the context of the cellular operators demand to lower the revenue share they give to the government and the private telcos plea to the Minister to moderate interconnect costs that the incumbent BSNL was demanding. Mahajan said private telcos would have to share social obligations and not expect only the incumbent BSNL to set up village telephones. A former government company, the international carrier VSNL, now owned by the Tatas had been calling for the Minister's intervention to persuade BSNL to give VSNL a higher share of the international call revenues than it was giving to private international carriers like Bharti Telesonic.

On the unviability of the low price for local calls, the Minister asked the private telcos to raise local call charges as they were free to do so. As far as he was concerned, he would not, as "I am a politician and have to get people's votes but Ratan Tata or Kumaramangalam Birla have no such compulsions. Why are they not raising the charges, he asked.

The Minister had a message for the telecom regulator TRAI chief M.S. Verma, who had earlier delivered a keynote address calling for a proper competition law to stem the tide of predatory pricing. Verma had also called for a single point regulator rather than the present status of the government and TRAI sharing the regulatory functions including licensing.

The Minister clearly hinted that he was not happy with the pace of decision making by the TRAI and asked why he was being asked to mediate in internal disputes of the industry when the statutory regulator himself was present. He rejected the plea to limit competition but admitted that competition was going to create problems.