Financial Daily from THE HINDU group of publications
Friday, Sep 27, 2002
Changes in telecom revenue sharing coming `Contentious issues can be solved if industry speaks in one voice'
The Minister for Communications and IT, Mr Pramod Mahajan, with the Chairman, Telecom Committee, FICCI and Joint Managing Director, Bharti Enterprises, Mr Rajan Bharti Mittal, at the Second Global Telecom Summit 2002 in Bangalore on Thursday.
BANGALORE, Sept. 26
IN a clear message that the Government is sincere in its intent to remove hurdles to help the telecom industry face the future challenges, the Communication and Information Technology Minister, Mr Pramod Mahajan, today announced that a change would be made in the condition of revenue sharing under which the private telecom companies could pay their share at the end of three months against the present practice of remitting it in advance.
He, however, said that the industry should maintain strict payment discipline and it could be adopted as a long-term arrangement only if it worked satisfactorily.
"The Government need not only be receiving criticism. It should receive pay cheques," the Minister said in a pointer to defaults by private telecom companies at the Second Global Telecom Summit 2002 here today.
The two-day meet has been organised jointly by the Ministry of Communications and the Federation of Indian Chambers of Commerce and Industry.
Mr Mahajan also indicated an early decision on increasing the cap on of foreign direct investment from 49 to 74 per cent. He, however, said that the ticklish issue of management control by the majority investor had to be addressed carefully before the Union Cabinet could arrive at any consensus. He sought to counsel critics of the government taking time to take a decision and said "we have to consider the national interest first. There are very few countries that have allowed even 49 per cent foreign direct investment in a strategic sector like this."
In a speech punctuated by barbs on the industry on its posturing on concessions and competition, Mr Mahajan said the need of the hour was for the industry and the Government to sit together and thrash out the issues amicably and avoid arbitration and litigation. Defending the Government's right to assess any issue from the national interests perspective, he said other contentious issues of spectrum management and interconnection policies could be evolved to the mutual satisfaction if the industry spoke in one voice and did not air different views through different representative organisations.
He would favour a consensus on the issues for which he sought the industry to work out an action plan to resolve the policy issues to the best advantage of business.
The Government will come out with a roadmap on revenue sharing for private telecom operators and try to resolve interconnect charges issues with joint discussions with the industry players, he said.
The Government is also likely to come out with a guideline for spectrum management in the "next few weeks", Mr Mahajan said. "I will consult the Defence Minister and will have to see how to make the spectrum available according the growing needs of the private players," he added. Currently, a major chunk of spectrum is controlled by the defence sector. Mr Mahajan also called for private participation in spectrum management. Commenting on discontent voiced by several operators on interconnectivity charges, Mr Mahajan said that "cost of interconnectivity is the issue and the Government and industry bodies should sit together and decide that." Seeking redressal from the regulatory authority or the judiciary will only prolong the dispute, he said.
The two-day meet is also attended by Mr Larry Irwing, former Assistant Secretary, Commerce, and Advisor, Telecom and IT to former US President Bill Clinton, Mr Lim Toon, COO, Singapore Telecom, and Mr D.B. Inamdar, Karnataka Minister for Information Technology and Mr Rajan Bharti Mittal, Chairman, Telecom Committee, FICCI and Joint Managing Director of Bharti Enterprises.
Mr Toon said the submarine cable laid jointly by his company and Bharti Enterprises remained unutilised to its full capacity because the Government had not granted the necessary security clearance. He stressed on a stable and transparent telecom policy and regulatory measures to ensure that investors had a sustained interest in India and could increase their investments.
Mr Irwing, while endorsing Mr Lim's views, also said there was also greater need to remove the awe about information technology among the average through effective education and communication methods.
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