The Telegraph
Since 1st March, 1999
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Convergence bubble bursts

New Delhi, Feb. 6: India is not yet ready for convergence products and services and the convergence Bill will only compound the confusion in the absence of a strong and reliable regulator.

Ernst & Young, a leading consultancy, says Indian consumers should not expect miracles of convergence amid the regulatory confusion prevailing in the country.

“The convergence Bill will compound the exiting problems like unresolved regulatory issues. It will further the uncertainties for all stakeholders in the convergence market,” said Sanjay Mehta, director Ernst and Young India Pvt Ltd.

Speaking at the fifth telecom summit organised by the Confederation of Indian Industry (CII), Mehta said, “Unclear basis of interconnect charges, disparate licence fee, regulator not perceived to be independent, dynamic competition at a nascent stage, wireless in local loop (mobile), cellular, wireline amidst litigation, privatisation of incumbent not yet to begin and the slow evolution of universal service obligation fund — all these make India a non-starter for the convergence era.”

He emphasised that there is a need to allow the competition to stabilise and proactive intervention of the regulator as a basic need for convergence market. The report from Ernst & Young also emphasises that in order to get prepared for a convergence market, there is a need to develop a transparent, cost-based regime with accounting separation and adequate spectrum allocation.

Mobile communications and the internet are expected to be the major growth drivers for convergence. “It is believed that the convergence of these two would produce innovations, new applications and new services that would not otherwise be possible. However, exploiting the new opportunities offered by the mobile internet will require high levels of capital investment,” the report states.

Presenting the Indian regulators view about the convergence, S.N Gupta, advisor, Telecom Regulatory Authority of India (Trai), said, “There is no precise definition for convergence and in absence of this it is difficult to develop regulation for convergence. But we have taken some aspects of communications as the basic components and developed the existing directives for the service providers.”

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