Trai asks telcos to play by rules, says they dont have clean hands

Written by Rishi Raj | New Delhi | Updated: Aug 10 2012, 07:37am hrs
Telecom Regulatory Authority of India (Trai) chairman Rahul Khullar has cautioned telcos that the legacy of adversarial relations between the regulator and the industry was not good for the development of the sector. Speaking at the annual general meeting of Cellular Operators Association of India (COAI) on July 30, Khullar said such issues on both sides must be avoided to move away from an adversarial mindset.

If the GSM operators association thought an interaction with the regulator would be a good PR exercise, they were clearly wrong. The meeting was not open to the media, but a speech transcript circulated to COAI members and accessed by FE clearly had some tough words for the industry.

Please do not talk to me through the media. My door is always open. Please engage with me directly, Khullar said. He also asked them to play by rules and warned of stern action against those found fudging tariffs.

I have three years in this position. When I leave, I want to be able to look back and say that I cleaned up some things. I was a tough policeman but not a strict one. I do not want to have a plethora of legislation you play by the rules, I will trust you; but if I catch you, you are dead meat. Bottom line is there has to be self-discipline, Khullar said.

There are some rather unpleasant legacy issues, (which no one wants to talk about) for both sides. Industry is not free of its sins. There is ongoing suspicion of departmental capture and regulatory capture by one or the other camp. We cannot carry on like this, in such distrust. We have to overcome this, the Trai chairman said.

Khullar was candid in pointing out that relations between the regulator and regulated were far from cordial. Rather, it is more appropriate to call them adversarial. I understand, and have been conveyed so on several occasions that the industry feels itself to have become a dart-board. I assure you all that I have no intention of throwing darts at the industry. The right to be heard is always there with you. I will always give you the opportunity to be heard, before I make a recommendation or give a direction.

On forbearance in tariffs, the Trai chairman had some advice for the industry. Trai is willing to live with some degree of forbearance on tariffs and intervene only in exceptional circumstances. I will trust you to be honest in your tariff plans. You can be ingenious, but please dont fudge. If I find fudging, then I will come after you with all I have got and I will not spare you. Khullars predecessor JS Sarma had floated a consultation paper to review forbearance. Under forbearance, operators do not need prior Trai approval to set tariffs but can file any new plans within a week of announcing it.

Khullar said he would take industry inputs before making recommendations. He would place greater emphasis on open house sessions, but the industry must come prepared, not to give sermons and delay decision-making. I will not let the consultation process be dragged on, with the intent to delay decision-making. I will be reluctant to initiate any consultation (you will really have to convince me) but when I do, I mean business. And I want to see it concluded.

Khullar did acknowledge the contribution of the industry in growth of mobile telephony and that they were going through financial distress. I must state that the industry has achieved a lot in terms of the huge outreach and the very very affordable service. However, where do we go from here If the industry continues to stay singularly focused on customer acquisition which has been the case in the past then, after another 50 million customers, its game over. The industry has not paid any attention to increasing revenue from each subscriber through enhanced applications like cloud services, e-health, e-governance, e-education. This is the next wave of revenue flow, the pie in the sky. So the industry should get onto this bus, else someone else will take the ride, he said.

On their current financial problems, the Trai chairman had this to offer: I have no doubt that you are in deep financial difficulty. Some may be a little above water, some a little below; but taking the industry as whole, all are below the water and will remain so for next 2-3 years before you recover. I consider it my bounden duty as per the mandate of the Trai Act to protect the interests of the service providers and consumers of the telecom sector, to promote and ensure orderly growth of the telecom sector. I cannot push the interests of consumers, forgetting the well being of the service providers, or promote the interest of service providers, to the detriment of the consumers. Both have to progress to ensure the orderly growth of the sector.