Delegates Doubt Trai'S Powers

Foreign investors yesterday discussed the role of Telecom Regulatory Authority of India (TRAI) and whether it actually enjoys regulatory powers.

They felt that the lack of infrastructural facilities in India is holding back investments, though the government tried its best to dispel fears.

The issues were raised during a closed-door session on IT, telecom and software at the ongoing Indian Economic Summit organised under the aegis of World Economic Forum and Confederation of Indian Industry (CII).

Talking to newspersons after the session, some of the delegates said that under the TRAI Act, 1996, the organisation was a powerless body and without a strong regulator, foreign telecom investors would not be inclined to invest in the Indian market.

TRAI vice-chairman BK Zutshi, according to sources, allayed the fears of the investors stating that the issue had been taken up at the highest levels in the government and hoped that it would be sorted out soon.

However, Zutshi is reported to have conceded that there was a conflict of interest between TRAI and the department of telecom (DoT) and the matter had been under discussion for some time.

Zutshi later told reporters that at present India's teledensity is 2/1000, while the ambition is to increase it to 9/1000 by 2000. "However, there is a shortfall of about $25 billion in the estimated project as the DoT can only fund up to about $ 30 billion," Zutshi said.

Foreign investors also questioned the new tariff proposals put forth by TRAI, which are under consultation currently. In a candid moment, Zutshi admitted that some more time needs to be spent on discussing the new telecom policy which the government proposes to put in place. Secretary, PMO, NK Singh on Monday had said the first draft of the policy would be ready within a fortnight.

Department of Electronics secretary Ravindra Gupta also admitted that the foreign investors had queries on the tariff structure and the monopoly of organisations like the VSNL and DoT.

A foreign investor is reported to have asked whether TRAI would be able to undertake tariff rationalisation of the spectrum.

Telecom adviser to Usha, India, Vijay Kapur told investors that the next century had tremendous potential for information and technology, especially software and telecom.

Russia, China and India offer great potential for IT companies in the future and should work together to take advantage of this opportunity, he said.