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Make profits but not at nation's cost, Sibal to telcos

Last updated on: September 6, 2011 15:07 IST

Make profits but not at nation's cost, Sibal to telcos

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Telecom Minister Kapil Sibal on Tuesday warned that the growth of the telecom industry would be hurt if companies did not align their profit-making motives with the national interest and such a scenario could lead to over-regulation of the sector.

"If national interest is on one platform and you are on a profit-making platform, nothing is going to work. If the growth does not benefit the country, then there will be regulations," Sibal said while speaking at an international workshop on regulatory frameworks, organised by telecom sector regulator Trai.

He emphasised that regulation was required to prevent the abuse of existing facilities, but over-regulation would hurt growth.

"If it is an over-regulated environment, then you can not get growth. If it's under-regulated, then you get abused. So deciding on an optimal level is a challenge," Sibal said.

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Image: Telecom Minister Kapil Sibal.
Photographs: Reuters
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Make profits but not at nation's cost, Sibal to telcos

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At the same time, the minister also asked the telecom companies to collaborate with each other and favoured sharing of spectrum between various players.

"It's time for us to consolidate industry. We can't afford 12-13 players in a circle. I think spectrum can be shared and I don't think there is a need for over-regulation for this," the minister said.

Sibal had earlier also asked the telecom companies to work together for future growth of the sector, rather than engage in corporate rivalry. "There should be corporate collaboration, not corporate rivalry," he said at an event in March.

In July also, Sibal said in an interview that corporate rivalry was hurting the sector. "Because the industry is at war with itself and because they are trying to destroy each other, the consequences are that we are destroying the hen that lays the golden eggs," he had said.

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Photographs: Reuters
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Make profits but not at nation's cost, Sibal to telcos

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Speaking at the Trai event on Tuesday, the telecom minister said a larger share of the available spectrum in the country should be given to telecom players for better delivery of services.

However, he didn't favour spectrum trading at the initial level.

Sibal also appealed to telecom industry players to share their profits with the domestic equipment manufacturing sector.

"For you to be successful, the industry has to be successful. Industry can't be successful if 90 per cent of the components of manufactured products are imported," he said.

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Photographs: Reuters
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Make profits but not at nation's cost, Sibal to telcos

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Sibal said that promoting indigenous manufacturing industry is in the long-term interest of foreign entrepreneurs as well.

"Not just manufacturing of components, but sync with indigenous manufacturing industry so that we are self-sufficient to large percentage," he advised the telecom sector players.

Telecom players have on various occasions opposed the government's proposal to make it mandatory for them to purchase a fixed percentage of their overall equipment requirement from indigenous manufacturers.

Sibal also expressed concern over the non-availability of content that will drive growth of the industry.

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Photographs: Reuters
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Make profits but not at nation's cost, Sibal to telcos

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"We are on the cusp of a revolution, optical fibre network will be available in the next 2-3 years. My worry is while network will be in place, content (such as for banking services) will not be in place," the minister said.

"We are trying to work on the issues that the telecom industry will face when all the consumers will be connected with telecom networks," he said while talking about the significance of connectivity and content.

Sibal said the problems of the common man in India, who is being exploited daily, can be addressed through communication.


Photographs: Reuters
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