The Ministry of Telecommunications has changed a vital clause in the license conditions for the country’s two privately-owned National Long Distance Operators (NLDOs) which will result in a huge bonanza worth several thousand crore rupees for each of the operators over the next seven years—Reliance and Bharti Telesonic are the two private sector NLDO operators at present. Thanks to this, these two NLD service providers will have to build up smaller telecom networks, though the very purpose of getting private sector players into the market was to build up additional infrastructure in the country.Under the licenses issued to NLD operators, they were supposed to set up ‘switching centres and transmission centres’ of ‘appropriate capacities’ at each one of the country’s 322-odd Long Distance Charging Areas (LDCAs)—India is divided into 322 LDCAs like say Coimbatore in Tamil Nadu, and within these, there are another 2800 Short Distance Charging Areas (SDCAs) like the hosiery-centre Tiruppur in Coimbatore district. Once they built up these switches or base stations at the LDCA level, the NLD operators were to pick up or deliver long distance calls from the SDCAs. The telephone company that carried the call from the customer in the SDCA and took it to the LDCA—this could either be BSNL or a private telecom operator—would get paid a certain amount for carrying the call to the ultimate consumer, while the NLD operator would get paid a larger amount for full long-distance call.So far, so good. What the telecom ministry has now said is that the NLDOs no longer have to set up switching centres in each of the country’s 322 LDCAs, but can instead set up larger switches in one or two places in each state instead — so, instead of setting up 322 switching centres, the NLD operators can make do with 30 or 40 larger switching centres instead. Since it costs between Rs 5 and 10 lakh a kilometre to lay fibre, and this means the operators have to lay at least around 100 km of cable less in each LDCA, it translates into a saving of over Rs 2,000 crore for each NLDO operator.From the NLD operators point of view, the decision is especially welcome as they were not keen to set up switches all over the country anyway since the bulk of national long distance traffic in the country is accounted for by around just 40 cities—so they would anyway prefer to concentrate in this region.Senior telecom ministry officials, however, justify the decision by saying that advances in technology now allow firms to service larger areas through a bigger-centralised switch without compromising on the quality of service. The move, however, was opposed by several ministry officials on the grounds that having only one master switch in each State would congest the network and was also a security hazard since an entire area could be blacked out if the switch got affected. Since no private sector telephone operator has so far established a meaningful network at the SDCA level, essentially the ministry’s decision means that the state-owned BSNL will have to carry all calls made from the SDCA to the LDCA level. So, if an individual in hosiery town Tiruppur wants to make a long distance call to Mumbai, BSNL will carry the call from Tiruppur (which is an SDCA) to Coimbatore which is an LDCA, and from here Bharti or Reliance can carry it to Mumbai. BSNL will get paid a fraction of the total cost of the long-distance call, while Bharti or Reliance will get a much larger share of the cost.
