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June 9, 1999
Outgoing communications minister Jagmohan today attempted to justify his tough stand on non-payment of licence fees by private telecom operators, a large number of whom have defaulted.
''Who made the bids and who signed the contracts,'' he asked industry leaders at the National Seminar on Internet Service Providers and New Telecom Policy 1999.
Unrelenting, Jagmohan challenged ''Were you not aware of the tender conditions? Who has created the problem? Is it possible for any government worth its name and which is fair and just to make any concessions?''
The seminar was organised in New Delhi by the Associated Chambers of Commerce and Industry of India, or Assocham, and the Telecom Industry and Services Association of India.
Jagmohan's thorny queries came a day after Prime Minister Atal Bihari Vajpayee shifted Jagmohan to the Urban Development Ministry and took the communications portfolio under his own charge.
Industry sources say the change was linked to Jagmohan's tough stand on realising licence fee from major cellular operators who had quoted abnormally high amounts while bidding and are now finding it difficult to pay.
''If a cricket match is going on, are the rules changed suddenly to benefit one team just because its five players get bowled out quickly?" Jagmohan continued with his barrage. ''Sure, there is a problem in the telecom industry today but the solution has to be within the framework of rules.''
The minister said several companies had not even paid 20 per cent of the licence fee. ''Is there a similar example of this kind anywhere in the world? I am not convinced that all telecom operators are losing money. The industry must come up with a creative solution that is within the framework of rules and regulations. The solution must also satisfy everyone and not just few players,'' he said.
Jagmohan said the attorney general has endorsed his stand and entrepreneurs other than those existing now must also be given a chance to enter the market.
Industry calls for resolving policy dilemma
Later, experts attending the seminar said the telecom sector is facing momentous uncertainty at present and there is urgent need to resolve policy dilemmas.
''All major domestic investors and remaining multinationals who still operate in India are shy of further investments,'' said P K Sandell, president of the Telecom Industry and Services Association of India.
Therefore, the solution of existing operators' problem is inexorably linked with the successful implementation of the new telecom policy, he said.
Sandell said there is essential need of harmony between the interest of major stakeholders, that is the manufacturing industry, the service providers, the government, the department controlling licensing procedures and the subscribers, which number 900 million.
''It would be naive to assume that the expected accruable national benefit could be obtained without solving the core issues but only by introducing a new policy framework,'' he argued. On the contrary, Sandell said, mature national management would consider it necessary at such a critical juncture to have all major players assemble together, identify the problems and the appropriate bold solutions would dilute conflicting compulsions and enable all players to focus on their respective tasks to maximise national welfare.
He said the technological context of the NTP 99 has considerably changed. India must have in the new millennium convergence technology to be the basis of its telecommunication infrastructure in tune with about 120 other countries by 2010.
Planning Commission Member Montek Singh Ahluwalia said convergence of technologies must be considered as a boon to the society.
The telecom policy must end monopolies, whether of the government or private sector, and ensure that benefits of new technologies are passed on to consumers.
''The basic telecom infrastructure must improve if India has to emerge as an information technology superpower. The policy must allow voice over Internet as is happening in other countries.''
Ahluwalia also called for ending cross-subsidisation of local calls and long-distance calls.
Assocham President K P Singh said the growth of small and medium Internet service providers is bound to be stifled due to current restrictive policies.
''India is on the razor edge of two different mindsets: one the traditional and the other which wants to forge ahead.
''In developed countries, trade on Internet is doubling or trebling every year. But in our country, we do not have cyberlaws in place.''
Singh also lamented that NTP 99 does not resolve crucial issues concerning existing telecom operators.
Central Vigilance Commissioner N Vittal said in his speech that a positive development of NTP 99 has been opening of long-distance telephony to private operators from January 1, 2000.
Also, the principle of one-time entrance fee and revenue sharing would hopefully avoid the consequences of tender-centric and licence fee-centric policy adopted so far.
Vittal, however, expressed surprise as to why NTP does not clearly state whether Internet telephony would be allowed. He said Internet telephony is essential for technological convergence.
Besides, the task of spectrum allocation should be transferred to the Telecom Regulatory Authority of India, he said.
Vittal urged the government to issue an ordinance to implement cyber laws as without this step the information technology policy cannot be fully implemented.
He said the issue of existing operators should be expeditiously sorted out. He suggested that the existing operators should be allowed to enter into revenue sharing scheme and money paid out by them to the Department of Telecommunications should be adjusted to future dues.
However, existing operators then will have to accept the multiplicity of operators, he said.
Vittal does not see the possibility of legal proceedings if existing operators are permitted to migrate into new telecom regime as apprehended in certain quarters.
Existing operators are obviously not going to file cases. Possibility of legal proceedings by those operators who had earlier lost out in the bidding process is also very distinct.
However, public interest litigation can be filed. To safeguard operators' interests in such a scenario, caveat can be filed, he said.
Umang Das, CEO of Modi Corp, said all funding to existing operators has frozen as existing operators are not covered in NTP. The provision of NTP implies that the policy would be applicable only in new areas like Jammu and Kashmir or Andman and Nicobar.
A K Choudhary, Koshika Telecom CEO, also stated that there is distinct possibility of legal wrangling if NTP permits existing operators to shift to revenue sharing scheme.
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