The Hindu Business Line : COAI push for second phase of telecom reform

THE Government must reduce entry barriers for mobile services by fiscal incentives and force the state-owned telecom companies to share their networks with private operators, according to the Cellular Operators' Association of India (COAI).

Citing a 17 per cent decline in the average revenue per user (ARPU) during 2003-04, the COAI Director General, Mr T.V. Ramachandran, said that a mobile phone has ceased to be a luxury item and operators have taken on large numbers of low-end customers last year.

"This is a welcome development. We too want the mobile phone to become a mass-market product. But the Government also has to play its role in increasing penetration and reduce entry barriers," Mr Ramachandran said.

He said that the private telecom operators have been seeking "rationalisation" of licence fee, spectrum and USO (Universal Service Obligation) charges. "The total levy should be brought down to 6 per cent instead of the about 14 per cent at present," he said.

The Government should also encourage private operators to bundle handsets with service by removing the cost of mobile phones in the Adjusted Gross Revenue (AGR).

"Even if a mobile operator provides a handset worth Rs 3,000 free of cost to attract a subscriber, the amount will be added to his AGR. In effect, the government is punishing the operator for increasing penetration," he claimed.

COAI has also demanded that the Government should allow private operators to share the rural telecom infrastructure of Bharat Sanchar Nigam Ltd (BSNL). "The networks of state-owned operators were built by public money and should be used in a manner that in the best interest of the subscribers," he said.

Mr Ramachandran said that the mobile telephone industry in the company was at a critical stage and needed a fresh dose of reforms to achieve the high growth numbers envisioned by the Government.

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