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Telecom regulator now to compete with operators - Views on News from Equitymaster
 
 
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  • Jun 10, 1999

    Telecom regulator now to compete with operators

    The Department of Telecom (DoT) is finalising plans to roll out cellular services in 17 cities in the first phase of its cellular project.

    The DoT network will enjoy a massive advantage over existing cellular networks as its local network extends nationwide. Subscribers to DoT's network will have the advantage of paying only local tariff for local calls made from anywhere in the country. In contrast, subscribers of private cellular operators will have to shell out STD charges for the same calls. In the first phase of the project, DoT will offer its services in 17 cities, which include Chennai, Hyderabad, Bangalore and Calcutta. The cost of the equipment has been estimated at Rs 3.4 bn. DoT will however have to pay the same amount of license fees as other private operators.

    The main reason cited for the PSU giant's interest in this segment has been the consistent fall in prices of cellular services, which will result in opening the market to new subscribers. Besides, DoT's cost of setting up a cellular network will be substantially lower as equipment prices have fallen. However, the biggest drawback could be DoT's lack of expertise in marketing its services, as it has never been exposed to competition.

     

     

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