Financial Daily from THE HINDU group of publications
Wednesday, Jan 16, 2002
Government - Policy
Industry & Economy - Telecommunications
International long-distance for domestic cos -- DoT prescribes Rs 25-cr entry fee
NEW DELHI, Jan. 15
THE Government has opened up international long-distance (ILD) services to Indian companies with a net worth of Rs 25 crore, following the end of Videsh Sanchar Nigam Ltd 's (VSNL) monopoly in April 2002, as recommended by the Telecom Regulatory Authority of India (TRAI),
The much-awaited guidelines for issue of licence for ILD services, issued by the Department of Telecommunications (DoT), specify that the applicants will have to pay a one-time non-refundable entry fee of Rs 25 crore in addition to an unconditional bank guarantee of Rs 25 crore which will be released on fulfilment of rollout obligations.
In addition, the ILD operators (ILDOs) should pay an annual licence fee (including USO levy) of 15 per cent of the adjusted gross revenue to be paid quarterly in advance.
The ILDOs have been allowed to rollout two types of services one for toll quality service (PSTN) and the other for less than toll quality service. The lower than toll quality service is to be provided at a lower tariff rate and on a different dialling code.
The interested parties are also expected to submit a detailed network roll out plan. In addition, a written commitment should be given that ILDOs will adhere to the inter-operability conditions in a multi-operator environment.
They will also have to give a commitment that they would comply with the quality of service standards, national fundamental plans, current national and international standards for equipment, and any requirement from the Government relating to national security.
The period of licence will be 20 years, with an automatic extension by five years subject to the satisfactory performance in accordance with the relevant terms and conditions of the licence.
All public tele-service currently permitted to VSNL have also been permitted to the new entrants. ILDOs have also been permitted to offer bandwidth on lease to other operators. However, they have not been permitted access subscriber directly which should be through the national long-distance (NLD) service provider or access provider.
The roll out obligations specified by DoT stipulate that within three years from the date of the licence agreement, receipt and delivery of traffic from/to all the exchanges in the country should be ensured through one or more gateway switches having appropriate interconnections with the NLD operators and meeting TRAIs quality of service regulations and network-to-network interface requirements.
For this purpose, a minimum of at least four direct routes, one in each region of the country needs to be established.
Delivery of traffic to all the countries in the world has to be ensured through at least four direct routes ie. one each to North America, Gulf region, Europe and any one location in South East Asia, Far East and Oceania) to ensure delivery of traffic to any global destination.
However, the guidelines specify that it shall be mandatory for all NLD service providers and all ILD service providers to provide interconnection to each other.
International long distance traffic has to be routed through the network of NLD service providers, to the ILDO's gateway for onward transmission to international networks.
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