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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: John Biddle who wrote (31593)	1/23/2003 7:32:10 AM
From: John Biddle	Read Replies (1) \| Respond to of 197214

Basic operators simmer over tariff hike New Delhi, Jan 22 news.sify.com Basic phone operators today said the demand of cellular operators for a termination charge for completing calls originating from basic networks (both fixed line and WLL-M) is absurd and would only "enrich mobile operators." In a letter to the Telecom Regulatory Authority of India (TRAI), the Association of Basic Telecom Operators (ABTO) outlined that from the very beginning, TRAI had fixed tariffs for cellular operators on a cost plus basis. "The airtime (outgoing and incoming) of cellular operators accounted for an internal rate of return and Return on Equity that not just ensured but guaranteed substantial profits for the operators," the letter said. Basic phone tariffs are likely to go up this week. ABTO fears that would undercut their profit margins. The letter stated that the cellular industry has been amazingly profitable and continues to be so. "If one were to take into account that the revenue share today has been reduced to 12 per cent, 10 per cent and 8 per cent for A, B and C category circles respectively, it will be self-evident that returns range anywhere between 25 per cent and 37 per cent and a return of equity of nearly 50 per cent," the association said. ABTO said that now the licensor is proposing reduction of this revenue share even further to one-two per cent. If this happens, their profit margins will become astronomical. The basic operators said cellular subscribers pay airtime, which is exorbitantly high for all calls made and received by them. Further the cellular subscriber has to pay access charges of Rs 1.20 for calling the basic network. "There is ample scope for cell companies to provide relief to cellular subscribers by not unnecessarily billing them for the so-called PSTN charges." ABTO pointed out that this rate can easily be taken out of the airtime charges being collected from the subscribers.