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Wednesday, May 12, 2010

TRAI recommendations to impact ind by Rs 15K cr: R-Comm

The slew of measures suggested by the Telecom Regulatory Authority of India seems to have found favour with Reliance Communications. Mahesh Prasad, Group President of Reliance Communications, finds TRAI guidelines to be extremely progressive, forward looking, and good for competition.

He welcomes TRAI recommendations, and feels that it provides level playing field for all players. "Established players had enjoyed the benefit of excess spectrum without any cost. TRAI recommendations give the telecom companies a level playing field."

On Tuesday, TRAI had suggested norms for mergers and acquisitions, capping of spectrum in circles, and cost for buying additional spectrum which has left most telecom stocks bleeding in a mildly weak market. Prasad stated the impact of the TRAI recommendations on the industry is likely to be Rs 10,000-15,000 crore.

Bihar is the only circle where R-Comm exceeds the TRAI cap, he said. "The additional payout for Bihar circle is around Rs 20 crore." R-Comm, he added, is eligible for additional spectrum in 12 out of 14 circles.

Prasad sees a 50 bps benefit due to the license fee reduction. Prima facie, he does not see any impact of license fee on Reliance Infratel.

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