Describing the Telecom Regulatory Authority of India’s recommendations on spectrum management and licensing framework — including rules on spectrum sharing and mergers and acquisitions — as forward-looking and constructive, a top Reliance Communications Ltd. official said the telecom regulator’s suggestions would bridge the gap between incumbents and new players by creating a level playing field.
“We believe that TRAI recommendation on M&A regulations are progressive and will help consolidation in the industry. TRAI has confirmed that committed spectrum for GSM is 6.2 MHz while for CDMA, it is 5 MHz. Thus operators can get up to 6.2 MHz in GSM as part of contracted spectrum. This will significantly reduce network cost for new GSM networks like RCOM and further help RCom in improving its business and cash flows,” said Syed Safawi, RCom’s CEO and president of wireless business.
While speaking with investment analysts during RCom’s global earnings conference call, Safawi said the company’s second quarter has been very satisfactory for RCom considering the background of seasonality in the industry.
“We are now a service brand already serving over 150 million customers,” he added.
On being asked about the imminent entry of Reliance Industries Ltd. (RIL) in telecom, Safawi said: “If there is any responsible player coming into the industry and growing the business especially by data, it is very good news. This is because we are at very early stages of the data revolution, and we have always said this is going to be the decade of data.”
“Given the fact that spectrum is limited, in 5 MHz, in 3G and also in LTE, players are going to have a smaller footprint of size, everybody is going to be responsible in the data play. If a new player comes in and over the next two to four years builds an ecosystem which drives data revolution, it will be positive for the industry. On the tenancy side, if we have tenancies coming in that will be a net benefit for us,” he added.
The company also expected a slowdown in the competitive tariff fixation game. “Recent tariff hikes by almost all the incumbents is a reflection of the abating competitive pressure on pricing,” Safawi said. “We have also revised tariffs upwards in both GSM and CDMA owing to inflationary pressures on cost. This will certainly help the industry in achieving pricing stability and improving the revenue growth trajectory.”
