Financial Daily from THE HINDU group of publications
Friday, Nov 08, 2002
DoT seeks lowering of licence fees Initiates talks with Finance Ministry
The Minister for Communications and IT, Mr Pramod Mahajan, with Mr Graham Burke, CEO, Idea Cellular Ltd, at the launch of Idea Cellular Service in the Capital on Thursday.
NEW DELHI, Nov. 7
THE Department of Telecommunications (DoT) has initiated talks with the Finance Ministry seeking to lower the licence fees and spectrum charges being levied on the cellular and basic telecom operators.
Announcing this at the launch of the services of Idea Cellular Ltd in Delhi, the Union Communications Minister, Mr Pramod Mahajan, noted that there is a need to take a relook at these levies as it is being found to be unsustainable for the industry as a whole. He also noted that there is need to review the present revenue sharing arrangement for interconnection.
"With almost all the private operators in the country incurring huge losses, it is only right to bring these rates on par with the international benchmarks and allow them to survive. The changes are being contemplated in order to make competition sustainable between telecom companies.
``Currently, due to the policy initiatives initiated, tariffs in the telecom sector have reached the levels that were prevalent internationally, hence the spurt in competition between companies offering cellular services. However they are all making losses. Keeping in mind the future, appropriate initiatives may have to be undertaken,'' the Minister said.
He also touched upon the necessity of providing quality services to the customer and called upon the cellular operators to optimally utilise the spectrum allocated to them in their operations. The need of the hour was to improve quality of services offered by operators in order to fulfil customer aspirations.
Earlier speaking on the occasion, Mr Graham Burke, CEO, Idea Cellular, noted that the company expects to grow at more than 80 per cent in India, without revealing how many users it plans to sign up in the Delhi.
"We will use quality of service, rather than price cuts, to gain customers. For the financial year 2001-02, we had notched a 135 per cent increase in subscriber base, by far the fastest growing of all operators in the country. Idea was also ranked No 1 in customer satisfaction among all operators in an independent survey conducted by NFO-MBL. This was further strengthened when it again topped the TRAI ranking in quality of service", he noted.
With a footprint dominating the map of India, the company accesses over 45 per cent of the total telephony potential, he said.
Idea Cellular, a equal joint venture between the Tata Group, Birla Group, and AT&T Wireless has its operations spread over Maharashtra (excluding Mumbai), Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh and Delhi. Mr Bruke said that the Delhi operations would be the country's first 3G compatible, EDGE-upgradable network that enable it to launch high speed data services, offer multimedia services and operate superior quality of voice telephony network.
With over 925 cells and six lakh simultaneous call handling capacity, the service will enable the customer to experience wireless internet on the mobile and computer.
Along with full capacity multimedia messaging service (MMS) on both pre-paid and post-paid, the tariff structure is competitive vis-a-vis the other operators with the additional benefit of automatic tariff correction programme that enables the customer to choose from the best tariff plan as per the usage pattern.
The subscriber can also have the option to use an additional pre-paid account on post-paid connection on the same mobile number.
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