Trai Amendment Will Sap Investor Confidence: Sodhi

The Telecom Regulatory Authority of India (TRAI) yesterday warned that any amendment to curtail its powers would undermine investors confidence.

Reacting to the department of telecoms (DoT) proposal to alter the basic mandate of the regulatory body, TRAI chairman Justice S S Sodhi said any amendment to the TRAI Act of 1997 would undermine investor confidence, not only in the telecom sector, but in the economy as a whole.

It would especially affect the confidence of the foreign investor, he added.

The fact that investor confidence is crucial to the success of telecom privatisation process has been brought forth in a recent study by Industrial Credit and Investment Corporation of India .

 

It estimated out of the total funding requirement of telecom companies of Rs 45,000 crore, over 55 per cent is debt funding, of which over 70 per cent would be foreign financed.

Meanwhile, sources informed that DoT has turned down TRAIs request for TRAI-DoT consultations prior to approaching the cabinet on the proposed amendments.

The authoritys call for the adoption of a transparent consultative process for the proposed amendment of the TRAI Act, with due weightage to the views of the authority itself, has not been heeded by DoT, sources said.

ICICI has called for transfer of all DoTs regulatory functions to TRAI.

Emphasising the invisible gains accruing from a modern efficient telecom infrastructure, Sodhi said the lack of telecom facilities could militate against economic growth.

One of the functions of the regulator is to facilitate growth in the telecom sector...while protecting the consumers interests , he said, reiterating that a viable telecom sector included a viable DoT.

Citing the international experience of introducing competition in the telecom sector, he said that the dominant operator had always emerged stronger.

Competition has always improved efficiency and brought down prices, he said.