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Veeshal Bakshi & Siddharth Zarabi
New Delhi, July 7: With the euphoria over migration to revenue sharing settling down, private telecom operators are beginning to discover some grey areas which could delay implementation of the package.
The industry believes they have to switch over before July 31, since revenue sharing begins from August 1. If this is so, the industry has just three weeks to take a decision which could make or break an operator's future.
There are many complex issues involved which operators have to consider before taking the plunge into revenue sharing. The industry is uncertain over the actual percentage of revenue share that may be determined by the Telecom Regulatory Authority of India (Trai).
"We are walking into the scheme blindly as we do not yet know what percentage TraiI will impose on us," a telecom chief executive said.
A major uncertainty in the private sector is on interpretation of the policy if even one of the two operators in a cellular circle decides to stick to the licence-fee structure. Since itwould mean continuation of the duopoly system, will the government allow entry of Mahanagar Telephone Nigam Ltd (MTNL) or other prospective operators in metro or non-metro circles in such a scenario?
The government plans to begin with an interim revenue share of 15 per cent of the gross revenues till Trai decides on the details of the revenue-sharing arrangement. What the government has, however, not clarified is whether this 15 per cent would include the inter-connection charges the cellular operators owe to MTNL or the department of telecommunications, operators said.
There is no indication on the entry-fee structure to be put in place for new entrants. Since Trai is expected to take some time before taking a final decision, the industry feels the government should have come out with some interim entry-fee structure just as it decided to begin with an interim revenue share of 15 per cent.
Above all, the 15 per cent interim revenue share has not found many takers in the non-metro circles. Since thecost of setting up infrastructure in the big circles like Bihar, UP, Rajasthan, MP, Orissa and Maharashtra is far higher than the metros, it would not have been improper to have a differential revenue-sharing arrangement for the metro and non-metro circles. For instance, metro operators could have been charged higher revenue share than operators in some large circles.
Telecom experts also cite the instance of difference in the cost of setting up a network in the north-east and a place like Delhi will also have to be taken into account while finalising the percentage.
Another issue is the future revenue streams. The present Rs 600 rental and the tariffs are based on the high licence fee which the operators have to shell out per subscriber. With the shift to revenue share and introduction of multipoly, competition will hot up resulting in lowering of tariffs.
Operators say that this coupled with introduction of the calling-party principle, which will make incoming calls free, will lead to a decrease inrevenues. If this scenario comes true, some operators which have low licence fees may prefer to keep away from revenue sharing.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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