Corporate Jan 16, 2013
New Delhi: Telecom industry needs to ensure that there is no silly competition in the market that drives down rates making businesses unprofitable, a senior Bharti Airtel official said today.
India's telecom sector is in serious financial trouble partly because of "court's action", which can't be controlled, and the rest because of certain factors that can be controlled by the government and the industry, Bharti Enterprise Deputy Group CEO and Managing Director Akhil Gupta said at the Convergence India meet.
"I must point out, very unfortunate for delegates who would have come here from abroad. You would be hearing disturbing news about telecom sector in India and, unfortunately, most of that is true. "The sector should have been in pink of health, it is in trouble today. It is in serious financial trouble," he added.
Gupta said some of the troubles may be beyond anybody's control, but some of that is. "Government would be little more forthcoming in terms of clarity, which hopefully will be done now. And industry, in making sure that there is no silly competition so that we plummet the realised rates at such a level that the business becomes unprofitable," Gupta said.
Gupta also serves as Director of Bharti Airtel. He said that in his view government clearly recognises that the telecom industry needs to be healthy so as to provide connectivity to a billion people, which requires billions of dollars in investment.
"For that, it has to be a healthy industry. I am looking forward to a glorious future," Gupta said. Bharti Airtel has posted decline in net profit for 11 consecutive quarters. Its third quarter (October-December) results for the 2012-13 fiscal are scheduled for February 1. Meanwhile, the company's Chief Executive Officer for India and South Asia Sanjay Kapoor has decided to leave the company.
Bharti Airtel management has repeatedly pointed out that pressure on margins due to stiff competition has led to decline in its net profit. The company has recently raised 2G data services tariff by around 25 percent.
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