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Updated: December 9, 2010 22:35 IST

Telecom sector should not be viewed as money-spinner: Sibal

Special Correspondent
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Communications and IT Minister Kapil Sibal (right) and FICCI past president Y. K. Modi at the India Telecom 2010, in New Delhi on Thursday. Photo: Rajeev Bhatt
The Hindu Communications and IT Minister Kapil Sibal (right) and FICCI past president Y. K. Modi at the India Telecom 2010, in New Delhi on Thursday. Photo: Rajeev Bhatt

Communications and IT Minister Kapil Sibal on Thursday cautioned against putting unnecessary pressure on the telecom sector for generating revenues which could lead to hike in tariffs. He also urged the telecom operators not to indulge in any kind of war of words as it could jeopardise the growth of the sector.

“The telecom sector should not be viewed as a source of revenue, especially in the context of the (2G spectrum auction) debate taking place today. Everybody is looking at the telecom sector as a source for earning money for the Finance Ministry,” Mr. Sibal told journalists here after inaugurating the ‘India Telecom 2010' international exhibition and conference, organised by the Department of Telecommunications (DoT) in association with the Federation of Indian Chambers of Commerce and Industry (FICCI).

“We must also ensure that the telecom industry had enough money to invest in the sector. If price of spectrum is high then you will reach a situation where you will not be able to provide low tariffs. Broadband and telecom should be looked upon as a vehicle of empowerment rather than a sector from which we can squeeze money to achieve our fiscal growth,” he said.

Referring to the war of words between telecom operators, Mr. Sibal said: “What I find today is unfortunate, some operators are at war with others. This is because at any given point of time they felt that they had been discriminated against…however, we will ensure a level-playing-field for all the telecom service providers in future.”

Earlier delivering his inaugural speech, Mr. Sibal called upon all stakeholders to work towards strengthening the hardware and manufacturing segment of the telecom sector. “Telecom as the service industry alone cannot continue to contribute to country's GDP at the level it is doing now for long,” he pointed out.

The Minister also underlined the importance of a strong hardware and manufacturing component of the telecom industry for sustainability of the sector's contribution to the economy. “Guidelines and policies need to be prepared in consultation with all stakeholders to ensure that the telecom sector becomes more and more investor-friendly, its penetration and reach increases to provide greater access and tariff remains low so as to offer the services at affordable cost,” he added.

On the occasion, the Minister also released the FICCI-KPMG report — Broadband for All — which reveals that telecom companies, whose operating margins are under pressure due to usage of multiple SIMs, multiple tariff corrections and rising competition, are keenly awaiting the roll-out of 3G and BWA to bolster the maturing urban markets and enhance margins.

The FICCI-KPMG report points out that the broadband sector is expected to log tremendous growth in the future as over 65-crore potential customers are waiting to be tapped. Rural India, the report states, is the key target market likely to drive the next round of growth for telecom companies, particularly for voice based services.

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