Several telecom companies have questioned the sustainability of the paisa-per-second tariff. Do you think this scheme will be feasible in the long run?-1.jpg "J.S. Sarma")
J.S. Sarma
The Telecom Regulatory Authority of India (Trai) follows the principle of forbearance on tariff issues. We believe that the market forces should be allowed to operate freely and we do not interfere with the fixing of rates. However, we are not only concerned about the healthy growth of the sector but also about the consumers' interest.
The trend of paisa-per-second tariffs is obviously good for customers because it is cheap and adds to their choice. The new telecom companies entering the market this year should ensure that call rates continue to be competitive. However, we want to make sure that such low tariffs do not impede the growth of the telecom sector or cause an imbalance in the level playing field. Therefore, we are examining the sustainability of these tariffs and will release a consultation paper on the subject, if required.
Recently, telecom companies have come under the scanner due to the high profit margins on SMSes. Do you think there is scope for SMS rates to come down?
As in the case of call tariffs, Trai is not involved in fixing SMS rates. Moreover, we do not usually regulate each telecom revenue segment separately and consider a tariff plan as a whole. For instance, a telecom company may be charging a little more for SMSes, yet offering low STD rates. Several such combinations of prices are possible. So we consider the charges of voice calls and SMSes together—the net impact on customers should not be exploitative.
What are the glitches in launching number portability? Do you think these will be resolved by 31 March?
There were two reasons why we were unable to meet the 1 January deadline. Firstly, several agencies, chiefly BSNL and MTNL, were unprepared for the new system. I think BSNL will be ready for number portability by 31 March, the new deadline. Secondly, there were security concerns that are being dealt with by the Department of Telecom. As of now, they are confident of being ready by the end of March.
What is the likely impact of number portability?
In the next few months, we expect 10 per cent of subscribers to switch service providers. It is difficult to predict the long-term impact except that it will empower the customer.
Do you think value-added services (VAS) will grow significantly this year?
Yes, these will as there is a great potential for growth. Unlike in other countries, where VAS is a key component of revenues for telecom companies and contributes up to 25 per cent to their coffers, in India, VAS isn't very popular. One cannot deny that the Indian mobile user is different from his counterpart abroad. His chief interest will continue to be voice calls, at best SMSes. This attitude is unlikely to change soon and can be the limiting factor in the growth of VAS.
How can the popularity of VAS be increased in the next couple of years?
One of the most important reasons VAS does not have too many followers is the low speed of delivery and inadequate content. With the entry of 3G technology, these problems should be resolved as images of better resolution can be shared and content can travel faster.
Another drawback is that most of the services can be accessed only through high-end handsets, which the majority of subscribers cannot afford. In other countries, mobile banking is one of the most extensively used services. The Reserve Bank of India is working towards making mobile transactions easier and more secure. Once this happens, we will witness a spurt in the number of VAS users.
In the past few years, the number of mobile users in India has grown exponentially. Do you think this trend will continue in the coming years?
Yes, the number of mobile subscribers has grown but there is no indication that mobile density has peaked. In fact, there is a huge market that remains to be tapped. Trai has received some data about the trends in the expansion of subscriber base. Mobile penetration should increase, but I can't give the rate of expansion until the data analysis is complete.
Has the growth of mobile users affected the subscriber base for landlines? If yes, how?
There has been no dramatic increase or decrease in the number of landline users in the past couple of years. Their number rises and falls periodically, but it is not linked to the growth of mobiles.
The National Do Not Call (NDNC) Registry does not work efficiently. What are the steps that Trai is taking to improve this service?
We have received several complaints and are working on a blueprint for improving the service. Meanwhile, I can only say that advertisement messages will also be brought within the ambit of the NDNC Registry.
What are the growth prospects for direct to home (DTH) television broadcasting?
Our chief concern about DTH is digitisation with addressability. Subscribers should pay only for what they want to see and operators should be more accountable for the quality of service. This principle has not been implemented completely. We shall soon release a consultation paper on how to improve addressability in a given time frame.
What are the telecom and broadcasting trends that customers should watch out for in 2010?
Customers will enjoy better and a greater variety of mobile applications with the coming of 3G technology. Number portability will make telecom companies more accountable as dissatisfied customers can switch service providers. We are working towards greater digitisation of television broadcasting and I hope the sector will become more disciplined this year.
