Telecom sector needs policy certainty: Assocham president (Interview)

December 12th, 2010 - 11:40 am ICT by IANS  

By Gyanendra Kumar Keshri
New Delhi, Dec 12 (IANS) Even though the Indian telecom industry is growing the fastest in the world, a stable policy framework is crucial to maintain the expansion and avoid scams like the one over allotment of airwaves, says the new chief of a top industry lobby.”What’s important for any industry is there is a policy certainty,” said Dilip Modi, the newly-elected president of the Associated Chambers of Commerce and Industry of India (Assocham) and managing director of the $2 billion retail-to-realty Spice Group.

“Anything like this (the current flip-flop) creates a period of uncertainty. It affects investment and thus growth,” Modi, a former chairman of the Cellular Operators Association and founder of Spice Telecom that merged with Idea Cellular, told IANS in an interview.

“The Indian telecom industry has a lot of potential for growth and just needs the right policy to sustain growth,” he said, referring to the strong expansion which has seen the subscriber base grow from 562.21 million as on Jan 1 to 723.28 million in end-October.

Modi also said that the chamber welcomed the appointment of a one-man committee headed by a former Supreme Court judge to examine the policy on allotment of second generation (2G) telecom spectrum, or airwaves, and licences between 2001 and 2009.

“We fully support the investigations. But whatever process has been stated should be implemented with speed and within a specified time frame,” Modi said, adding the Telecom Policy of 1999 had become outdated and needed to be replaced with a new vision document.

“We are cooperating with the government on development of the new policy framework. Our focus is to ensure that whatever policy framework evolves should be stable and provide a level playing field.”

He also commented on the series of scams that have hit several industries, especially in the telecom and financial sectors. “Corruption is a pain in our society. We have to do away with it,” said the Imperial College-educated industrialist.

The new Assocham president also suggested the setting up an integrity commission in line with the Planning Commission to focus on how to curb graft. “We support any framework that helps in curbing corruption. We also want to be a stakeholder in that.”

Speaking about his priorities as one of the youngest heads of 90-year-old Assocham, Modi said he will strive to engage more with the government in evolving a new policy in some sectors crucial to spur India’s growth and expand the chamber’s activities globally.

“There is an opportunity for us to engage further on policy and look at critical sectors like retail, real estate, warehousing, digital and mobile value-added services to get industry status,” said Modi who restructured what was earlier the B.K. Modi group.

“It is essential to legalise a lot of things,” he said, giving the example of the real estate sector, which was the second-biggest employer after agriculture, but did not have an industry status.

Asked about the chamber’s concern over foreign direct investment (FDI) in multi-brand retail, Modi said: “Assocham favours a gradual opening of the retail sector. Initially it should be 26 percent, then 51 percent and gradually it should be opened up fully.”

He said the retail trade sector needed a lot of capital; so money from overseas was also essential to fund growth. “But the sensitivities have also to be kept in mind,” he said, referring to the thousands of mom-and-pop shops that may be affected.

Speaking about his chamber, Modi said Assocham, which has over 200,000 companies and professionals as members, plans to open two offices overseas — in New York and Tokyo — within a few months. The chamber will also open offices in Kolkata and Chennai.

“The idea is to be nearer to our members and address concerns speedily and efficiently.”

(Gyanendra Kumar Keshri can be contacted at

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