Union Finance Minister Yashwant Sinha Promises Kinder Reforms

Unlike the other telecom multinationals, British Telecom did not join the initial rush of foreign investors in telecom. Three years later, the former British public sector behemoth has reason to be smug. Arun Seth, managing director, BT Worldwide (India) Ltd spoke to Business Standard about the government's bailout package and the company's investment plans in India.

Q: What is your view on the just approved revenue sharing package?

A: The telecom sector has become the weathervane for the global investor. And, by clearing the package, the government has reiterated its commitment to economic reforms. Telecom along with power are the sectors with the highest foreign direct investment approvals to actual investments. The sector was hampered with structural anomalies which prevented ventures in the sector from being viable.

 

Q: What are these structural anomalies?

A: It is no secret that licence fees have been totally unrealistic. However, another fact that is less emphasised is the fact that the whole model was based on the premise that the more you use, the more you paid. Take for example, the charges that Bharti Cellular has to pay to Mahanagar Telephone Nigam Ltd. Though we are the biggest single user of MTNL, we have to pay for each call at the highest rate, rather than the other way round. The government should learn from its own experience with public call offices, where it allowed a 15 per cent discount on billed charges. The result is that we have PCO kiosks even in smaller villages, with thousands of people employed and accounting for 25 per cent of the revenues of the department of telecommunication.

Q: What are your views on the revenue sharing package?

A: We think that the announcement was a very strong signal to global investors of India's resolve to liberalise the economy. What is now needed are concrete steps and answers to questions like the exact percentage of revenue share, the number of players etc. It will go a long way in clearing up the uncertainty and give investors reason to consider investing in India. However, there are still some aspects which are unclear.

Q: What about your company's investment plans?

A: We have always been committed to India. The migration to revenue sharing, if adopted by all, will definitely make a return on investment much more likely. But, unless the details are spelled out clearly, we can't even guess what our strat