Review norms for growth of state-run telcos: Par Panel

With telecom gear procurement guidelines delaying network expansion, a Parliamentary panel today asked the government to ease norms so as to ensure growth of state-run telecom firms like MTNL and BSNL.

The panel said although there has been a stupendous growth in the telecom sector in the country in the last five years, the share of state-run telecom operators has declined from 34.69% at the end of 2007 to 14.42% at the end of July, 2011.

"It is not clear how the government is citing its own guidelines as a reason for declining market share of public telecom service providers. If there are any restrictive aspects in its guidelines, it is for the government to review the guidelines and make appropriate modifications," report of the Committee on Estimates tabled in Parliament said.

As per the report, Ministry of Communications and Information Technology in a reply to the Committee had said one of the reasons for declining market share MTNL is that the company has to follow government guidelines on the procurement and upgradation of equipment.

This results in multiplicity of vendor for the same kind of equipment leading to their operability/integration issues thus resulting in delay in commencing, it had said.

Also, the Ministry had said that since technology is changing very fast in telecom sector and new applications are being developed very frequently, "it is not possible for MTNL to induct the new developments due to absence of price reference in the tender".