Telcos need to avoid silly competition on rates: Airtel

The telecom industry needs to ensure that there is no silly competition in the market that drives down rates making businesses unprofitable, a senior Bharti Airtel official said on Wednesday.

India's telecom sector is in serious financial trouble partly because of the "court's action", which can't be controlled and the rest because of certain factors that can be controlled by the government and the industry, Bharti Enterprises deputy group CEO and managing director Akhil Gupta said at a meet in New Delhi.

"I must point out, it is very unfortunate for overseas delegates to find that most of the disturbing news about telecom sector in India is true. The sector should have been in pink of health but it is in serious financial trouble," he added.

"The government should be little more forthcoming in terms of clarity, which hopefully it will be now. And industry, in making sure that there is no silly competition that will result in the plummeting of the realised rates to such a level that the business becomes unprofitable," Gupta said. Gupta also serves as director at Bharti Airtel.

He said that in his view the government clearly has to recognise that the telecom industry needs to be healthy so as to provide connectivity to a billion people and this requires billions of dollars in investment. "For that, it has to be a healthy industry. I am looking forward to a glorious future," Gupta said.

Bharti Airtel has posted decline in net profit for 11 consecutive quarters. Its third quarter (October-December) results for the 2012-13 fiscal are scheduled for February 1. Meanwhile, the company's CEO for India and South Asia Sanjay Kapoor has decided to leave the company.

Bharti Airtel management has repeatedly pointed out that pressure on margins due to stiff competition has led to decline in its net profit. The company has recently raised 2G data services tariff by around 25 percent.