STD operators seek shortcut for networks

Private basic operators for long distance services or STD services now want a short cut in laying down their networks. And the Communication...

Private basic operators for long distance services or STD services now want a short cut in laying down their networks. And the Communications Ministry seems all set to grant them this demand and that too after short circuiting the Telecom Regulatory Authority of India TRAI.

The move would involve a change in the stipulated Licence Agreement signed by the NLDOs.

The NLDOs have demanded that they be let off the hook from providing switches or Point of Presence POP in 322 locations called the LDCAs Long Distance Charging Areas in telecom parlance in the country to the fewer TAX locations or places where larger telephone exchanges are set up for connecting and transmitting long distance or trunk calls.

The Communications Ministry which has in the past been under pressure to seek various clearances before it allows any change in the clauses of the Licence Agreement which are considered sacrosanct to a great extent, has devised a strategy to dub this as a mere change in definition of the POP.

In a note circulated by the communications ministry, under 8216;8216;the TRAI Act, it is mandatory to seek the recommendations of the TRAI for changing terms and conditions of Licence to service providers.8217;8217;

But, the note further states, if the 8216;proposed amendment is a measure to facilitate competition and promote efficiency8217;8217;, the Telecom Regulatory Authority of India Act does not stipulate any mandatory seeking of clearance from the Regulator.

To further avoid any controversy on the subject, the ministry has taken refuge in an old communication with the TRAI wherein the regulator has stated that 8216;8216;the POP is a technical arrangement made by an NLDO under which it can accept outgoing calls from and deliver terminating calls to the area required to served.8217;8217;

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The justification for private operators approcahing the ministry for an amendment in the licence conditions is in order to cut costs especially as telecom traffic in all 322 areas may not be cost effective.

However, analysts feel that any change would defeat the purpose of building a huge network of private companies alongside the government-run Bharat Sanchar Nigam Ltd BSNL as in the long run the country would lose out on a parallel competing network which would ultimately drive down costs through competition.

Moreover, this also doesn8217;t augur well for maintaining the level playing field argument for Bharat Sanchar Nigam Ltd which has had to build networks even in non-remunerative sectors and has worked out cost structures based on this. 8216;8216;This would be a case of an incumbent facing a disadvantage,8217;8217; analysts explain.