Infrastructure gap in telecom unbridged: report
Our New Delhi Bureau
27 APRIL
INDIA'S telecom sector is going through an identity crisis and needs to cover some ground before it can move towards dynamic competition, says an Arthur Anderson report.
The crisis revolves around the fact that telecom-spend in India is amongst the lowest worldwide. To illustrate: Indian telecom revenues are 1/10th the revenues of AT&T, and revenues from telecom, as a percentage of GDP, are just 1.2 per cent as compared with over 3 per cent in the developed world, the report says. Investment in telecommunications is low with low penetration levels and the government focus to increase infrastructure, hasnít helped. This is definitely a gap that needs to be bridged, the report says.
The report comments that the entry fee for the existing cellular and basic service providers at $1.2bn till July 31, '99 ó which was the licence fee arrears which operators had to pay for a shift to revenue sharing ó is probably amongst the highest licence fee pay-outs in the world.
It further suggests that the objective of levying a licence fee should be to recover only the administrative costs involved in the issue and administration of a licence. This suggestion is similar to that put forward by the TRAI recently.
The report recommends that in the Indian context of a smaller market size ($5bn), lower purchasing power, vast geography and a skewed market, competition should be introduced in a gradual manner if infrastructure development has to take place.
The document further advises that India should move faster to- wards corporatisation of DTS and ensure a level playing field for the private operator to expand the market and build world class infrastructure.
Source : The Economic Times. April 28, 2000