Telcos against cap on service operators
New Delhi, July 18 (UNI) The country's leading telecom players today expressed their resentment over TRAI's recent move to cap number of service operators as they said it would kill competition in the sector.
At the open house discussion on 'Review of license terms and conditions and capping of number of access providers' here, representatives of leading telecom players including Reliance and Tata said the current growth has been largely fuelled by the free competition in the sector.
They added that the benefits of increased competition in the market is evident in the form of highest growth in subscriber base and lowest charge per minute on voice call.
But British telecom major Vodafone officials at the open house welcomed the TRAI's stand on placing a cap on the number of access providers operating in the country even as other players like Reliance Communications and Tata Teleservices (TTSL) crying foul over it.
According to Indian Chamber of Commerce and Industry (ICCI), the cap on the number of service providers will surely restrict competition and will be detrimental to the future growth of the telecom services in the country.
For a population of 120 crore there are only seven mobile operators which means that there is only one Operator for every 15 crore people.
Subscriber per Operator in India is one of the highest in the world. India has 2.36 crore subscribers per operator whereas Australia has 29 lakh subscribers per operator, Malaysia has 65 lakh subscribers per operator and United Kingdom has 59 lakh subscribers per operator.
Indian telecom operators are earning much higher Profit Margins (EBIDTA margins) and Return On Capital Employed (ROCE) than operators in many other countries.
Even with reduction of tariff in recent years, the EBIDTA margins of listed Indian telecom operators have increased from 34 per cent to 40 per cent (source: TRAI Consultation Paper No 7/2007). Market valuation comparison also shows that Indian telecom players have one of the highest valuations across the globe, according to ICCI.
EDS: Picking suitably from earlier series.
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