Just some months ago, the telecom sector was the toast of the investing community. With the results of leading players like Airtel coming in, things now look very different. The 10 million new subscribers per month, the investing community has finally realised, don’t mean much if they are paying just Rs 50-60 per month. It is difficult to understand just what these operators were thinking when they went around slashing rates to below those prevailing in any part of the world. Telephone companies in India had become like the credit card companies of earlier years —just get customers to use your card, never mind if they don’t have the capacity to repay later!
The telecom industry has to realise it is going down the path to disaster and it needs to rationalise its tariffs before it is too late. Add to this, the controversy over whether there was corruption in the manner in which the new licences were given out, and the picture of despair over the sector’s fortunes worsens.
N Kumar, New Delhi
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