Thomas K. Thomas

New Delhi, July 5

THE Telecom Regulatory Authority of India proposes to introduce stringent norms for reporting of subscriber figures by cellular companies.

The TRAI move, aimed at checking inflated growth numbers, is likely to have an impact on the valuation of the mobile operators and the spectrum allocation policy of the Government.

According to a note circulated among the mobile service providers, TRAI has directed them to exclude connections that have not generated revenues for more than 30 days.

Most operators give a 90-day grace period to pre-paid card users before deleting the subscriber from the database.

The TRAI note has also said that post-paid subscribers who have been disconnected for non-payment of bills will also be considered as inactive users.

Connections given to employees and business partners free of cost will also be kept out of the subscriber base for reporting purposes.

The telecom regulator has said that SIM cards with dealers, distributors, and sales channel will not be included in the subscriber base.

"Different operators are reporting the subscriber base using different methodologies. This leads to inflated numbers," said the TRAI note.

The telecom regulator has sought the operators' comments on the proposed changes.

"The objective of the exercise is to reduce the difference between the reported subscriber numbers and the active users so that a more realistic picture is available to all concerned."

Most cellular operators, however, are against the suggested reporting norms.

If the operators adhere to the TRAI norms, then there will be a dip in subscriber base by at least 5-6 per cent.

This will have an impact on the valuation of the companies. That apart, the demand for additional spectrum by the operators will lose some steam.

As per the Government policy, spectrum - the raw material for offering cellular service - is allocated based on subscriber numbers.

(This article was published in the Business Line print edition dated July 6, 2005)
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