The Telegraph
Since 1st March, 1999
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Mahajan to send proposal to Singh Telecom tariffs set to tumble

New Delhi, Nov. 7: Telecom tariffs could tumble 15-20 per cent if the finance ministry accepts a proposal to slash spectrum charges, licence fee and revenue share, communications minister Pramod Mahajan said.

The idea, floated by his ministry, has been crystallised in a blueprint that will be sent to the finance ministry by the month-end. A final draft, which seeks to align the three rates to international benchmarks, should be ready by December. “Discussions will begin soon with finance ministry officials,” said a senior official in the communications ministry.

Along with the rate-cut plan, policies governing spectrum management, licence fee and revenue sharing will be revamped as well. The minister criticised the defence ministry for not fully utilising the spectrum available to it, but said there was little he could do about an organisation that is a ‘holy cow’. “Due to security reasons, we cannot question them,” he added. In the same breath, he urged cellular operators to optimally utilise the frequency allocated to them.

Speaking at the launch of Idea Cellular Service in the capital, Mahajan said changes in spectrum and licence fee, besides a smaller revenue share, are being considered to make competition in telecom sustainable.

Emphasising the need to provide good services, he reminded Idea that service, not tariffs, will carry the day. “Today, customers expect value for money. If the quality of services are good, nobody minds paying extra. Due to the telecom boom, an average customer is not swayed by tariffs, and is conscious of value-added products and services being offered,” Mahajan added.

Taking a swipe at private operators, he said he was not personally satisfied with the quality of service provided by fixed and cellular operators. The SMS (short messaging service) that was sent to me on Diwali looks like reaching me on Ramzan,” the minister said in a remark about services being offered now.

The stinging observation left executives of private mobile operators in Delhi — Hutch and AirTel — a trifle embarrassed, with none ready to acknowledge Mahajan as a user. A senior Mahanagar Telephone Nigam official, however, said it had given the minister ‘two land-line phones and a Dolphin cellular connection’. “We would not like to say whether he uses it.”

Mahajan said the need of the hour was to improve services to fulfil customer aspirations. “Though competition had brought down telecom tariffs, market opportunities to improve what’s on offer are still immense.” The minister had a pat for India’s cellular industry, saying it was perhaps the only sector that had broken social barriers in the country. “Each and every person is today using mobile services in some form or the other.”

Idea goes to Delhi

Idea Cellular — owned by the Birlas, Tata and AT&T — today launched its Delhi service in a debut that pits it against the troika of Bharti, Hutch and MTNL.

Idea has five tariff plans and 3G-compatible, EDGE upgradable network that will facilitate high-speed data services, multi-media services and voice telephony networks. It will also offer general packet radio service (GPRS)-enabled network to give wireless high-speed Net access facility on mobile phones and computers.

The company says it is ready to rope in more partners, and has resumed talks with BPL after an abortive attempt early this year. “I am not willing to say, it is off (the alliance BPL with Idea) since the negotiations are still on and we hope to get a decision that benefits us both,” Tata Industries’ MD Kishore Chaukar said.

The Rs 500 crore invested in the Delhi launch will be increased to Rs 800 crore over time. Idea offers mobile services in Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh and Chattisgarh.

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