A difference of opinion has emerged between telecom regulator Trai and telecom operators on a new ceiling on national roaming tariffs.

Trai believes that there is a growing feeling among the subscribers of mobile services and other stakeholders of the need to revisit the national roaming tariffs fixed by it in 2002, but the telecom operators are insisting that the rates should be decided by the market forces.

In response to the consultation paper brought out by Trai on the review of ceiling tariffs for roaming services, Airtel, BSNL, Tata and Reliance have opposed the idea that Trai should fix a usage-based composite ceiling tariffs for national roaming services separately in respect of outgoing calls (local, intercircle) and for incoming calls.

Airtel said that the approach of forbearance has been successful in the Indian telecom market and this is clearly evident from the fact that since then, the customer tariffs have shown a consistently declining trend to the extent of 70 per cent. "This clearly demonstrates that the market forces are sufficient to ensure competition," said Airtel in its communication to Trai.

"Any attempt to regulate the tariffs of a small faction of the overall usage would force the operators to revisit their customer tariffs, at the higher side, which will effect the masses," added Airtel.

Echoing Airtel viewpoint, BSNL said, "There is no need to prescribe any other ceiling tariff for national roaming services and roaming tariff should be left to market forces." Agreeing that there should be no new ceiling, Reliance Communications however said that the ceiling tariff on roaming air time charges can be reduced further to bring in greater affordability to subscribers. "The ceiling charges for roaming air time should be reduced to Rs 0.75 per minute. To this charge, the interconnection usage charge along with surcharge element should be added to arrive at composite roaming tariff for subscribers," said Reliance.

On the factors that are limiting competition in the roaming services market, Airtel said that though Trai has prescribed the ceiling of Rs 3 per minute (excluding PSTN/IUC charges as applicable) the tariffs offered by the operators are well below it. BSNL, in its response said that roaming service in itself is not a market but is a mechanism to connect a customer when he is going out of his service area. For an ordinary customer the incidence of roaming is so low that roaming charges do not get reflected in his buying decision. On the other hand the high end customers, who use roaming extensively make their decision mostly on quality of service rather than tariff, said BSNL. "Under these circumstances, a significant competition on roaming charges alone should not be expected," said BSNL.

With rapid globalisation, evolving technology, increasing investment in infrastructure and the availability of high quality engineering talent, India’s infrastructure equipment industry is expected to touch $4.2 billions by 2010 from $1.95 billion in 2004.

However, to leverage opportunities for growth in domestic and exports markets, the industry must focus on enhancing capabilities in R&D, service delivery and human resources management, according to a recent CII-KPMG study on the Indian infrastructure equipment industry.

The study says that India has a large domestic market for infrastructure equipment, estimated at nearly $1.9 billions and has a growing and skilled workforce. The country also ranks amongst top three of 30 nations in terms of availability of skilled labour force and has one of the lowest labour costs per hour compared to other developed and developing countries.

The new infrastructure investment by the government and private sector put together for 2004-09 is estimated to the tune of $141 billion. This is expected to translate to a demand for infrastructure equipment of about $18 billions.

India’s infrastructure equipment market size that comprises primarily of product sales from the organised and unorganised sectors overall is estimated to be between 15-18 per cent. Earthmoving and road construction equipment, with a turnover of $1.09 billion, was the biggest segment in the organised sector, accounting for nearly 68 per cent of the turnover. The market size for Indian tunnelling and drilling equipment used in mining applications was estimated at about $216 millions. It accounted for about 13 per cent of the organised sector. The material handling equipment market was estimated to be $160 millions, accounting for 10 per cent of sector turnover. Cranes account for more than 60 per cent of this segment, followed by forklifts.

The spare parts revenues as a percentage of total sales for representative players ranges from 20 per cent to 29 per cent, according to industry estimates.

The CII-KPMG Study says that the engineering services outsourcing is a key opportunity for the industry. It estimates that overall engineering and design services outsourcing from India could be about $1.8 billions by 2008. Exports of Indian IE were estimated at $35 millions in 2004-05

Now that there is a good ch-ance that you might have recove-red from the excesses of New Year’s Eve, let’s sit you folks down for a bit, and indulge in some crystal-ball gazing for 2007. What’s the information technology industry going to look like this year? Well, the Big Three systems integrators — TCS, Insfosys and Wipro — are expected to continue their bull run, with TCS crossing the $4 billion mark with ease.

Infosys is expected to breeze through the $3 billion mark with Wipro taking up the rearguard action. A massive number of people will be added to the ranks of code writers at the large systems integrators, while others will ma-ke a play in different geographies, opening development centres which offer a cheaper and more stable labour force.

However, the only damper on the bull party could be a softening US economy, which provides most of the gravy to the Indian software sector. This could have an impact on the IT budgets of major US corporations, which in turn could mean some loss of traction to the systems integrators, but is still early days yet.