Salutary Initiatives

President, Telecom Enterprises

Business Unit, Tata Group

Amidst the various geopolitical tensions, the Reserve Bank of India has done a commendable job. The initiatives coming on the back of increased credit offtake to some of the key manufacturing industries augurs well for the economy as a whole.

It would not be out of place to mention here in that the industry sentiments, both for new as well as old economy players, as a whole, have been on a very nervous plane.

The governor has reiterated a preference for soft interest rate, which should augur well with the industry as a whole.

 

This along with the other measures spelled out in the credit policy would help and support the industry in maximising growth, which is the need of the hour.

As the telecom industry is capital-intensive and is primarily in the investment phase, the lower interest rate regime would allow players to access funds at lower costs.

This will reduce the overall project cost and the other losses and should help in achieving early break-even, which will further boost our endeavor to provide more services at lower price to the customer without pressurising profitability.

This has become more important for the service providers as the revenues are moving southwards, for one and all.

With the annual inflation seen at around 5.0-5.5 per cent in FY 2003-04, M3 growth pegged at 14 per cent and GDP expected to grow at 6 per cent, the indication is of a possible increase in the purchasing power of the people.

With telecom services now increasingly becoming more of a necessity than lifestyle symbol, we expect both usage and subscription would continue to see a rising trend, which should be a positive move for the industry.

The opportunity ahead of us in terms of increasing teledensity from current level of around 4 to the double digit mark is huge and active collaboration between the government and the industry should make it happen.

While the RBI has spelt out the possibility of interest rates bottoming out we are hopeful that the soft interest rate regime would continue with the increase in GDP growth rate and reduction in inflation during the course of the year.