“Definitely… in 2009 itself” is what was told by A Raja to reporters in New Delhi when he was asked as to when the 3G auctions are expected. The jinxed 3G auctions which have been delayed many times over in the past might just see the light of the day this year if A.Raja is to be believed.
The main bone of contention in the 3G auctions has been the license fees which has taken a hit due to the recession. A Raja probably feels that by the end of 2009 the turnaround in the market would be visible and thereby it would be a right time to execute the 3G auctions.
Mr A. Raja also created a stir he announced that he expects Telephone tariffs to fall as low as 10 paisa a minute for local calls and 25 paisa for domestic calls seconding the earlier WATblog report.
Currently tariff rate for local and domestic calls ranges between 40 paisa to 1.5 rupee per minute differing from plans to operators. Although India is home to the lowest tariff rates, the local call rates has not seen major decline in last few years despite decline in domestic call rates which have been reduced from Rs. 4 per minute to almost Rs. 1 per minute. The government also has an upheaval task of universal applicability of lower tariffs to all plans of Telcos without any caveat as they currently charge higher for pre-paid.
The minister’s populist measure at the same time may come as a shock for industry experts as well as for Telecom majors as such lower tariff would further put pressure on ARPU’s which is on a major decline and quotes at sub–African levels.
The call rates could have gone down long time ago had TRAI not rejected Reliance communication proposal way back in 2003 offering to provide local calls at 40 paisa during their launch but under pressure they had to reverted it to on-site calls.
The main question is will government completely abolish termination charges for domestic calls which are currently at 20 paisa per minute, a necessary precursor for such absurd tariff. Termination charges are paid by one operator to another on whose network the call ends.The move may also face delay as it would affect BSNL badly and government plans to come out with an IPO may be put up on a back-burner.
Reducing tariff will only reduce service quality to a new low as it would severely hurt Telcos revenues. Some even suggests that lower 3G tariffs in future could provide a prelude for lower tariff through internet telephony.
The government action of determining tariff on its own does not sound like an autonomous body and should insist take industry favorable actions.Actions such as lower call units would provide remedy for call drops and faster 3G auction coupled with lower 3G tariffs may also help.
India has already reached respectable Tele-density figures which requires action for more quality service rather than absurd telecom prices which would harm the industry just like it did to airlines sector.The need of the hour is to improve thrust on broadband as telecom is already on a growth path and make way for blanket tariff decline to 40paisa for local calls and 60 paisa for domestic calls which would help the ecosystem to prosper.
I’m dying for 3G to come. I will finally be able to leverage my iPhone’s full capacity.
I saw A Raja’s interview on TV and he mentioned that the 3G auction would take place in two months.
Hopefully all the Big Boys are ready with all the other preparations like infrastructure, technology, etc. so that as soon as they get the license, we will have 3G deployed in no time.
All in all, I give it another 6 months, MAX.
@raseel – Im not sure how much of an impact 3G would make given its charges.. Maybe early adopters like you and me will use it but would it revolutionize surfing on mobile is a questionable thought.