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Verma stresses on convergence of telecom services

Telecom Regulatory Authority of India chairman M S Verma has said that integrated players would overshadow single segment players in the telecom sector and stressed the need for convergence of services to tackle competition.

''For good competition, innovation and growth of telecom sector in India we must seriously consider the convergence of services. The basic objectives in the telecom sector today are to promote access to key telephony at low price as affordability is a major issue in India, enable conditions for competition, ensure that there is no abuse of market power by dominant players and also that the new technology is able to reach people all over,'' Verma said.

Speaking at a telecom seminar Connect 2002 organised by the Indian Institute of Foreign Trade on Saturday, he stressed that these steps should be undertaken in a transparent and non-discriminatory pattern.

Also, he said that there was a need to give a fillip to the teledensity in India, which ''is very low compared to the world average.''

Even though the telecom sector had grown better (recording a compound annual growth rate of 109.6 per cent) than other sectors, it should not be termed an unqualified success, ''as our potential far exceeds our overall performance in telecom,'' he said.

''We have divided the industry into individual positions- cellular, long distance, international long distance, basic, etc. Legacies, licensing and delivery of telecom has further fragmented the industry and the sooner we leave this the better,'' he felt.

The TRAI chairman addressed issues central to growth of telecom and mentioned providing access to telecom services (both basic and cellular) as a key strategic method.

''India presently has one per cent density for cellular penetration. Our rural teledensity is only 0.7 per cent. Taking urban and rural areas, our total teledensity is five per cent, compared to the world average of 15 per cent.

''At this rate, we will take another 12 years to catch up and thus we must move much, much faster,'' Verma said.

Adding that integrated players would overshadow single segment operators in the future, he said, ''We need to find the most technical, financial and geographically efficient ways to increase the teledensity".

Verma said basic line continued to cost proportionally higher in India than it did elsewhere. ''The last mile connectivity in India costs about Rs 28,000. This is almost four times the connectivity of a mobile phone and needs to be brought down to competitive levels for future growth.

''Another key hurdle is that the internet connection user charges in the Indian telecom market are almost 20 per cent of costs. This dampens the resources channeled into growth of the sector,'' he said.

The seminar was also addressed by BSNL DDG S D Saxena, Anil Tandon from IDEA Cellular, S Mohanty, COO, Escotel and Rahul Rastogi, senior vice president, IBM India.

Tandon spoke on the issue of the frequency allotment and the problems faced by the cellular and wireless operators.

''Operators are facing problems of inadequate spectrum allocation, which has led to a congestion of the network and thus made adhering to the strict guidelines set by TRAI, in terms of the quality of service a problem,'' he said.

Also, he spoke on the technology issue, saying operators should spare no effort to initiate the use of new technology, and so should the government operators, ''because the ultimate goal is to earn profitability by providing the maximum service benefits to the customers.''

Escotel's Mohanty said the pre-paid segment in mobile phones would occupy 80 per cent of the volume in the market by 2005.

He said cellular tariffs in India were the lowest in the world.

''A problematic factor for the cellular industry is that the average revenue per user is expected to slide from Rs 1070 in March 2000 to Rs 500 by March 2003 and will result in losses of Rs 7,700 crore (Rs 77 billion) for the Indian telecom industry.

''But, we also hope that with the offering of new services, the ARPU may rise to Rs 750 by 2007, enough to save the industry.

Services will be the revenue drivers in the future for the 11.6 million subscriber strong Indian market.

''Voice mail services, m-banking and real time video will witness the most demand among the Indian cellular users,'' he felt.

BSNL's S D Saxena adviced that code division multiple access would provide a distinct technological edge and hence should be embraced equally by private operators as well as the BSNL.

Rastogi demonstrated the ''speedy'' model used by IBM and said cellular operators should seek partnerships with hardware companies for more reliable technologies.

UNI

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