At a time when the Telecom Regulatory Authority of India is grappling with the issue of unified licensing, the Confederation of Indian Industry has come out with a formula to deal with the crisis.
The CII has suggested setting a benchmark entry fee, based on the amounts paid by the fourth cellular operator.
Supporting the unification of telecom licences, the CII said the government should pursue a licensing regime that left little scope for interpretation by various interest groups.
According to the formula offered by Kishor Chaukar, chairman of the CII's telecom council, all basic operators who want to offer full mobility could be asked to pay the benchmark fee after deducting the licence fee already paid by them, while the existing cellular operators, who have already paid in excess of the benchmark, could be exempted from paying the annual licence fee for 2-3 years.
Similar packages can be worked out for those operators who want to get into long-distance operations.
Chaukar said the government, lenders, sponsors, promoters and the regulator must work out the benchmark fee to ensure a level playing field.
Chaukar said unification of telecom licences would create a level playing field among the operators.
"It is about time we get out of the straight-jacketed mindset where we have categorised operators by the service they offer. Technology is advancing fast and given the circumstances, convergence is the best solution. Of course, the issue of level playing field has to be addressed first," he added.
When asked about the fate of smaller operators in a converged regime, Chaukar, managing director, Tata Industries Ltd, said size did matter in telecom.
"If in the process smaller operators get affected due to competition, there is no way out. The gross cost of setting up a telephone line is Rs 15,000 to Rs 25,000, while the average annual revenue per user is just Rs 4,000.
"Therefore, if a company has to be viable, it has to get at least six million customers for which you need volumes of operations," he said.
Chaukar said it would only be a matter of time before the differentiation based on technology was gone and the consumer would not even know whether the service provider was using CDMA or GSM.
"It will be wrong to think that the 15 million existing mobile subscriber base is what will decide the future of the telecommunications market." In fact, it will be the 100 million users yet to happen who will decide the market," Chaukar said.
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