Letter to BS: Don't kill the telecom sector, India's global image at stake

This refers to the editorial “Saving the telecom sector” (November 18). Vodafone and Airtel posting mammoth losses aggregating Rs 74,000 crore in Q2 of this year is a matter of deep concern. These two service providers also have to pay up cumulative licence fees and spectrum user charges around Rs 1 trillion within a short period of time. This will likely result in these two companies folding up and the users will be facing a monopolistic situation. Monopolies resort to all sorts of anti-consumer actions like predatory pricing, restrictive practices, poor service etc with no other options for hapless consumer. If these two companies close down, it will badly impact the balance sheets of the banks who have lent to them. The financial system cannot afford another massive hit after the PSB saga, NBFC/HFC problems and urban cooperative bank fiasco. It will result in massive big job losses and hit associated businesses. The international image of the country will take a serious beating at a time when there is growth slump and high unemployment.

Reckless competition is also responsible for this situation. There is a need for the concerned regulatory body to examine whether unfair practices are being followed in the industry. Assets and businesses of these two companies which are unrelated to their core activities need to be hived off. 

The government must allow for the payments of dues (by these telecos) to be staggered and penalties and interest need to be waived, if possible. It cannot allow the golden goose to be killed. The government has wisely decided to examine this issue. Something meaningful needs to be done quickly lest it will be like bolting the stable door after the horses have fled unemployment.

Arun Pasricha, New Delhi

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