NEW DELHI, India-The Indian cellular industry has opposed a proposal by Communications Minister Pramod Mahajan to allow unrestricted competition in mobile telephony, saying it will amount to violation of the national telecom policy, the regulatory law and licensing terms of existing players (see related “Asia” news).
Expressing “great shock and dismay” over the proposal, Cellular Operators Association of India (COAI) Director General T V Ramachandran said the telecom policy provides for due process to be undertaken by the regulator to determine the need and timing for the introduction of more operators into cellular services.
Introduction of additional operators must be in consonance with the provisions of policy and the statutory process and dictated by availability of spectrum, the best interests of consumers and the business viability of the industry. On all the three counts, entry of more players is not justified, Ramachandran pointed out in a letter written to Mahajan.
“The fourth operator for Delhi-with huge sunk investments of 8 billion rupees (US$165.2 million) that are lying idle after about one year-is still waiting for allocation of spectrum to be able to commence services,” the letter pointed out. The availability of adequate spectrum to existing operators, in line with international norms, should be the first concern of the government to ensure good quality and affordable services, he added.
Ramachandran said: “Even in the current competitive environment, the industry is operating far below costs and incurring huge losses. Introduction of more players into such an environment would only serve to severely fragment the market, resulting in large-scale unviability of businesses and inevitable sickness.”
Earlier this week, Mahajan had hinted at the entry of more players in the cellular sector.
