Newly appointed Telecom Regulatory Authority of India (Trai) chairman JS Sarma has said consolidation in the telecom sector was imperative in order to spur investor interest. There are currently up to seven operators in each telecom circle in the country, a figure that is set to rise to 18 once new licensees start operations?the highest anywhere in the world. ?Consolidation is a must. But how exactly we should go about it is something that we have still to decide,? he said.
In his first exclusive interview with a newspaper since he took charge of the telecom watchdog on May 14, Sarma told FE that consolidation would also help reduce disputes in the sector–one of his top priorities. ?I will first meet all companies individually and then convene a meeting of top managements of major players in a fortnight to discuss a dispute redress mechanism prior to aggrieved parties moving the Telecom Disputes Settlement & Appellate Tribunal (TDSAT),? he said.
Despite the overall economic slowdown, the telecom sector has shown spectacular growth, adding a record 15 million subscribers each month since January, making India one of the fastest growing markets in the world. The total number of subscribers at the end of April stood at 430 million.
However, as a former member of TDSAT, Sarma has simultaneously seen the number of disputes between operators, as well as between operators and the government and Trai, burgeon to around 30 cases in the past one year, from just a dozen a few years ago. Indeed, things have gotten so bad that virtually every ruling by the regulator has been challenged. Sarma?s predecessor, Nripendra Misra, also identified setting up a dispute resolution mechanism before a case goes to TDSAT as an important area.
Another area flagged by the new head of the telecom regulator was ways to increase rural connectivity. Rural teledensity is currently at 13 and plans are afoot to raise it to 50 within the next three years. ?All options should be explored: 3G, broadband wireless access and optic fibre. It is through a combination of all three that we will be able to achieve this,? Sarma said.
Sarma certainly has ambitious plans for the sector. He wants to achieve a subscriber base of 1 billion by 2012. The current target of 500 million connections by end 2010 is expected to be achieved before time. ?Enhancing and sustaining the current growth rate is very important for us at the moment,? added Sarma.
?Resolving spectrum related issues is also very important,? Sarma said, underlining the fact that 3G and WiMAX services should not be delayed any further and the auctions expedited. ?3G is very important from the technology point of view. More than voice, it?s important for data services, which would not get an impetus in India without 3G and WiMAX. Broadband penetration depends on data services and we also need PC and Internet penetration to increase,? Sarma concluded.
