Financial Daily from THE HINDU group of publications
Wednesday, Jan 23, 2002
Industry & Economy - Telecommunications
Bharti pact with cell cos heading for a jam
NEW DELHI, Jan. 22
THE interconnect agreement between cellular operators and Bharti Telesonic Ltd (BTSOL) for routing mobile-to-mobile STD calls, announced with much fanfare in end-December, seems to be heading for trouble.
According to industry sources, the cellular operators are now in talks with Bharat Sanchar Nigam Ltd (BSNL) for a higher revenue share on mobile-to-mobile STD calls routed through its network, even as their agreement with Bharti is awaiting the approval of the Telecom Regulatory Authority of India (TRAI).
As per the present interconnect agreement, cellular operators get to retain only five per cent of revenues from STD calls as they pass on 95 per cent to BSNL, the incumbent carrier of long-distance calls. The agreement with Bharti, on the other hand, envisages a 30:40:30 revenue share, with 30 per cent going to the mobile operator where calls originated, 40 per cent to BTSOL and 30 per cent to the terminating operator; clearly, an advantage to the mobile operators.
However, following the announcement of this agreement, BSNL slashed its STD rates by close to 60 per cent, wiping away the cost advantage accruing to the cellular operators. Bharti has now been forced to match BSNL rates in the MoU with cellular operators that it has forwarded to TRAI for approval.
When contacted, a leading cellular operator who is party to the agreement said that the nitty-gritty of the deal had not been finalised and definitive agreements were yet to be signed. They pointed out that the agreement as initially announced holds.
However, without the nod from TRAI, Bharti would not be able to put into force its agreement with the cellular operators, scheduled for launch from January 26.
The authority had raised several queries on the agreement, claiming inconsistency with the licence agreements. Clarifications were sought on as many as 12 points which range from setting up of switching and transmission centres, point of interconnection, tariff plans, billing system and carrier selection.
Most of the plans detailed in the MoUs, the authority had noted, did not conform to the existing licence agreements.
While the clarifications on these issues have already been submitted, BTSOL is awaiting the approval from the authority, which it is unlikely to get in a hurry.
As per the original schedule, in the first phase starting January 26, the agreement was to come into force in Delhi, Mumbai, Kolkata and Chennai and in the States of Karnataka, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh (West), Haryana, Gujarat, Punjab and Maharashtra.
In the second phase starting April 1, the agreement was to be operational in Uttar Pradesh (East), Rajasthan, Tamil Nadu and Kerala. The North-East and other parts of the country were to be covered in the final phase.
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