Companies setting up telecom towers in a tight squeeze

Punjab may be a lucrative market for telecom service providers, but for small entrepreneurs engaged in setting up telecom towers, business has never been as bad.

While telecom players are earning big chunks of revenue from the state, SMEs attached to the telecom service providers in Punjab are suffering due to non-payment of dues by private players.

The vendors who put up towers for the service providers of two telecom majors have been left in the lurch by the officials of the companies, who are not ready to own responsibility for the work executed by the former.

On the one hand, these small entrepreneurs are being denied their dues, while, on the other hand, service providers are earning huge revenues through the sites put up by these vendors.

The vendors allege that while one company has not released their payment since the first quarter of 2006, the other is yet to release the retention amount for the 2003-05 period. According to norms, payments should be cleared within six months from the date of execution.

The companies could not be reached for their comment.

In order to execute work, a majority of the vendors have to seek loans from banks at exorbitant rates of interest. "Since most SMEs don't have any fixed capital (factory, machinery etc) to mortgage, they are not given loans easily neither are they eligible for subsidies from any financial institution," a source said.

"There is no dearth of opportunities these days due to a boom in the Indian economy, but the delayed payments are deterring our growth," a vendor said.

A ground-based tower costs Rs 26-28 lakh while its roof-top-base can be set up at a cost of Rs 18-20 lakh. In Punjab, the expansion of the towers is now evenly spread and areas targeted are along the highways and semi-urban and rural centres. Visualising the potential, telecom players are further expanding their network in the hinterland.