Big Telcos Lobby To Prevent Entry Of New Operators

Here’s why consumers get treated shoddily in India. Large cellular operators such as Airtel, Reliance, Hutch, Tata and BSNL/ MTNL who have a pan-India presence are trying hard to block the entry of new service providers. [via The Indian Express] Their reasoning: business would become financially unviable if there is more competition. Of course, that’s what the government is here for: to help big business make more money, crush small businesses and prevent consumers from getting cheaper and better service.
But wait a minute, did they say unviable? According to the article, a Telecom Regulatory Authority of India (Trai) consultation paper showed that Indian operators are earning much higher profits (EBITDA margins) and return on capital employed (ROCE) than operators in most countries. Even with a reduction of tariff in recent years, the EBIDTA margins of listed Indian telecom operators have increased from 34 per cent to 40 per cent. Indian telecom operators also have the highest valuations in the world.
Anyways, so on July 18 the Trai will hold an open house session in Delhi on capping of the number of operators in telecom services. The bigger operators say that the government should cap the number of operators in a circle so that the existing companies remain in good financial health. They also maintain that as spectrum is limited, no new licences should be given.
Consumers! as usual you get to face the wall.

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