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Telecom sector needs a clean up- Kapil Sibal

Mumbai, June 11 (): Telecom sector in India is going through a communication gap and needs to get the connection right, says Union minister Kapil Sibal.

Sibal has asked for a meeting with mobile-phone companies’ bosses to sit across the table and help resolve law suits by which 95% of foreign investors in this sector have pulled out. Sibal also handles the law ministry. Bloomberg TV interview with Sibal revealed this.

Last year, the foreign investment was $2 billion in Indian telecom sector, globally rated second largest. In the last fiscal ending March 2013, it stood at $93 million.

The Supreme Court verdict on the sale of spectrum led to 122 companies losing their licenses last year. DOT has charged many companies for sharing the airwaves in regions where it does not have a license to purchase airwaves from other operators beyond the allotted limit.

After the court verdict, Bahrain Telecom and Emirates Telecom pulled out while Norway Telenor, Russian Sistema along with Indian companies Docomo and Idea have moved courts against DOT.

In 1995, a call cost Rs 15 per minute to a mobile and one had to pay for incoming too. Now with thirteen companies offering mobile telephony with a subscriber base of 863 million, rates are now at Rs 0.5 which is around 9 cents, the lowest in the world.

Sibal says that the infighting among companies, the fight with bureaucracy and a total loss of Rs 2.5 trillion has put the industry in the worst state than before. He said foreign investments in this sector were around $7 billion in total but none are making money.

Some of the high-profile cases are the Vodafone, rated globally as the second biggest mobile service provider, being denied permission to renew 2G licenses in many big cities and metros. It has moved the court on this.

Tax men asked the company to pay $2.2 billion towards acquisition of the Indian arm of Hutch. The cabinet decided to initiate a reconciliation process on the tax matter. Bharti Airtel has moved the court on DOT charges that it has more spectrum than what it bought from the government. Clarity on acquisition could bring about a consolidation and reducing the players in the telecom market.