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Friday, September 11, 1998

Telecom hike to hit middle class

ENS ECONOMIC BUREAU  
NEW DELHI, SEPT 10: It will be the middle class consumer at the receiving end of the Telecom Regulatory Authority of India's (TRAI) tariff stick. The tariff proposals unveiled by TRAI yesterday lay tremendous emphasis on the reduction in the tariffs for the high-end bulk users of telecom services leaving the individual subscriber completely in the cold.

While rentals for individuals are virtually set to double from the existing monthly slabs varying between Rs 50 to 190 to Rs 160 to 310, free calls are to be slashed by 20 per cent for urban users and for rural user by almost 50 per cent, local call durations are down from 5 to 3 minutes - a cut of 40 per cent and rates are up to a flat rate of Rs 1.30 per call instead of the staggered Rs 0.80 to 1.40 per call. If this isn't bad news for the individual consumer what is?

And all this hiked cost does not come with an in-built commitment from the operator to ensure at least a reliable phone which doesn't go dead every monsoon. And will the operatorreimburse the subscriber if my phone remains dead for more than two weeks in a month? Agreed, that TRAI will address these issues subsequently, but will the tariffs be affected before the quality of service is a question every subscriber has the right to know.

TRAI's paper can be appreciated on the grounds that it moves towards a regime which strives to ensure adequate protection on the investments made by operators by relating tariffs directly to costs, one cannot but feel let down on the grounds that the objective of pushing up the growth of the telecoms networks and stimulating the growth of the subscriber base itself and push up teledensities in the country may be dreams which would now be even more difficult to achieve.

If protecting returns on investment have to be a crucial part of the telecom policy, can it be done at the cost of making a cheap means of communication at the disposal of every single individual in the country, is a question that TRAI will have to answer. Communication can not beturned into a premium service simply because in the remotest of the remote village, citizens' fundamental need for security is dependant on access to communication facilities.

The imminent danger arising out of over emphasis on concessions to bulk users and corporates is the fact that it will encourage private operators to concentrate their networks limited to the areas where such subscribers are available - which may be some specific areas in a town and a few towns in a city. There would be no obligation for the operator to build a network to connect the last individual as in any case revenues from such customers is not going to be substantial enough for the private operator to readily incur huge capital expenditures to build such a large network. What will happen to the National Telecom Policy of 1994 which envisaged building up of a network with help from private operators to reach every remote corner of the country.

Further, if the prohibitive tariffs deter individuals from subscribing to newconnections, the success rate in telephone penetration may be retarded which will ultimately take its toll on the assumed growth in volumes of traffic inherent in the proposals forwarded by TRAI.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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