Intra-circle STD to be opened up finally

New Delhi, August 11: It's final. After weeks of virtually a pitched battle between the Department of Telecom and the private operators, t...

New Delhi, August 11: It’s final. After weeks of virtually a pitched battle between the Department of Telecom and the private operators, the domestic long distance, or STD, market will be fully thrown open on August 15. While the DoT and the ministry of telecom were fighting for only partial opening up, the Prime Minister’s Office which was ranged on the other side, has prevailed. A formal announcement will be made on Independence Day.

Only problem is that the new compromise solution is full of grey areas, and is certain to increase the disputes between operators and the government. Interestingly, the new policy also gives the ministry of telecom very wide-ranging and discretionary powers.

Earlier, the DoT was of the view that, of the total Rs 12,000 crore domestic long distance market, only the inter-circle market should be opened up. Essentially, if a call is made from one city to another, but within the same state, it is called intra-circle. And if it made from one city to another in a different state, that is inter-circle. The DoT view was that the intra-circle traffic, valued at around Rs 8,000 crore, should not be opened up. This was finally turned down, and both inter and intra-circle long distance telephony are to be opened up.

The compromise formula, however, is quite curious. It has finally been agreed that the new long distance operator (NLDO) will be allowed to carry intra-circle call traffic, but only after it has signed a mutual agreement with the Fixed Service Provider which operates basic telecom services in any particular state. So, if Reliance is an NLDO from Mumbai to Delhi, in order to carry intra-circle long-distance traffic in Maharashtra as well, it will have to reach an agreement with either the DoT which operates services in Maharashtra or with Hughes Telecom which is the private sector operator here.

Now, since it is not compulsory, it is not clear that the NLDO will ever get such an agreement going. In which case, it is open to the ministry to persuade the DoT which is present in all states, to sign up such agreements with the NLDO. The terms of such agreements are also not spelt out, and it is not certain if the DoT has the right to refuse this as yet.

Similarly, under the policy, the NLDO does not roll out a certain additional phone network in a state at the LDCA or district level, it stands to lose some amount of guarantee money. It is also not clear as to how this network is to be built up, if the NLDO does not have an agreement with the DoT or the private operator in that state.