Poor policy killing Indian telecom, says regulator Khullar

India's once-booming telecom industry is under stress due to lack of confidence in government decision-making, the head of the Telecom Regulatory Authority of India, Rahul Khullar, said in so many words.

He also suggested that TRAI should be given more teeth. Despite the infamous 2G scam, major decisions are still taken by the telecom ministry or the department of telecommunications (DoT), which functions under ministry orders.

Khullar said the telecom industry is under stress financially because of falling margins and lack of foreign investments

"Indebtedness is huge. There is literally no flow of foreign investment - except for companies that are foreign held. And they may need to infuse some capital to meet the new FDI caps. Otherwise there are no foreign investors banging down your doors trying to enter the telecom sector," Khullar said at a telecom summit organised by the Confederation of Indian Industry.

"The real problem has been the loss of confidence in public decision making. The process is under doubt, the outcome is under doubt, everything is subject to increasing doubt and scrutiny; and that loss of confidence has spawned irrational fears and led to a situation," he said.

Khullar virtually admitted that the government got greedy amid the spread of much-needed telephony in India. Even though they had little or nothing to do with it, ministers quickly started killing the cash cow.

''In the last few years everybody in the country just got carried away. I am not talking about one individual, I am talking about the medium, I am talking about the judiciary, I am talking about Parliament ... all of us, we just simply got carried away," he said.

He also suggested that the Comptroller & Auditor General of India (CAG) may have been correct in estimating huge losses due to the cheap sale of spectrum in 2008.

"This presumptive loss business has led to a substantial real loss because what it has actually amounted to is almost a complete standstill in decision making - and that is something which has really affected the sector for the last four years," Khullar said.