TRAI proposals to hurt new operators, M&A: Pradip Baijal
13 May 2010
Telecom companies have been up in arms against the Telecom Regulatory Authority of India's (TRAI) recommendations on spectrum and mergers and acquisitions. Bharti has charged TRAI of making recommendations tailor-made to benefit select operators. Vodafone echoed those views, and added that the one-time spectrum fee could put the industry in jeopardy.
Commenting on the new tussle, Pradip Baijal, Former Chairman of TRAI and Chairman of Noesis Strategic Consulting Services, said TRAI recommendations will discourage new operators and M&A. He added that the technology neutrality between GSM and CDMA has not been achieved.
Sanjay Chawla of Anand Rathi Services, an analyst who tracks the telecom sector, sees the one-time fee for spectrum as the biggest negative. "The telecom industry is already reeling under the effects of irrational pricing."
He said the one-time spectrum burden on Bharti will be Rs4,000 crore. Chawla sees a net impact of Rs25 and Rs10 per share on Bharti and Idea.
Here is a verbatim transcript of the exclusive interview on CNBC-TV18. Also watch the accompanying video.
What your broad based outcome or outlook is on what the recommendations have set forth?
Baijal: It is a 400 page recommendation. There are number of very positive features in the recommendations, but there are some recommendations which cause some concern.
