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No gloom in telecom sector, only correction: BSNL chief

Last Updated: Thursday, December 6, 2012 - 20:07

New Delhi: Stating that there is no gloom in the telecom industry, BSNL Thursday said the sector has grown "too fast" in the last few years and a correction is taking place at present.

"...We have been growing rather too fast in last five-six years, so in my opinion, a correction was due and that correction is taking place, so therefore, there is no gloom," BSNL chief R K Upadhyay told reporters here.

He added there is a huge potential for the sector to grow and companies should take advantage of the situation to kick start the second phase of growth.

"This is the right time for a second kick-off, it is a reality check happening and the companies are in best position to take advantage to kick-off the second phase of growth," the BSNL CMD said.

The telecom industry has been going through tough times as a result of minimal growth in subscriber additions and huge cash outgo for paying spectrum charges.

As of September 30, 2012, there were 937.7 million telephone subscribers in the country, of which 906.62 million were mobile phone users.

Out of the total 906.62 million wireless subscribers, only 698.96 million were active for the month of September 2012.

From a growth rate of 12-15 million additions a month, the total net monthly addition has now become negative as operators like S Tel and Etisalat DB have shut shop completely, while others like Uninor and Tata Teleservices have stopped offering services in select circles.

Rating agency Fitch has also assigned a negative outlook for telecom sector in 2013.

"The outlook for the telecom sector in 2013 is negative, reflecting expected weaker balance-sheets due to regulatory payments to re-acquire licences and continuing limited ability to raise tariffs, given the high level of competition," Fitch had said.


First Published: Thursday, December 6, 2012 - 20:07
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