Financial Daily from THE HINDU group of publications
Tuesday, Feb 26, 2002

Port Info

Group Sites

Info-Tech - Telecommunications

New telecom rules may hit NLD operators

Kripa Raman

MUMBAI, Feb. 25

NATIONAL long-distance operators (NLDOs) could be deprived of substantial revenue opportunities should mobile and basic telephony services tie up directly with international long-distance operators (IDLOs), something the telecom regulations allow for from April 1, 2002.

The National Telecom Policy 99 allows for both basic and cellular providers ("access providers") to tie up directly with ILDOs as soon as NLD service is opened up to competition, which it is now. "Access providers will start doing so as soon as the time for it comes around,'' said the technology head of a private basic telephony company.

This direct interconnectivity is allowed only in places where ILD gateway switches and that of access providers are located at the same station of Level I TAX (Trunk Automatic Exchange). Otherwise it is mandatory for all ILDOs to pass on traffic to NLDOs only.

The logic of allowing direct interconnectivity in such locations is that since both types of switches are in close proximity, there would not be any substantial component of national long distance routing involved, in any case.

However, telecommunication experts have pointed out that the cream of international traffic traffic originates or terminates exactly in those places where both the international gateways and Level I TAX exchanges are present. Currently, the only international operator, VSNL, has its gateway switches in the most traffic-heavy locations in the country, such as the metros.

And, what prevents the industry from deciding to put up both gateways and exchanges at places where a lot of international traffic generates or terminates, marginalising NLDOs further? asked a senior MTNL official at TRAI's recent open house on interconnection norms.

The greater loss would come from another possibility, that arbitrage could happen, fears the industry. Especially since packet switching technology is allowed, national calls could go from one location in India (where both the international gateway and the Level I TAX are present) to another passing through routes outside the country and bypassing the NLDO networks totally.

"There is substantial reason for these apprehensions,'' said the India country head of an international telecommunications firm. "It will not be good for the industry. Arbitrage will take place."

He felt there could be some confusion with respect to the technological aspect as well. "We also do not know about the numbering plan that would be followed should the NLDOs be bypassed. It could go crazy. Ordinary international carriers would not like to tie up with many basic providers.''

However, said telecom experts, since every Indian corporate group with an interest in NLDO is well spread across the spectrum of telecom services, there might be little protest on the issue.

What they would lose at one end, they could gain at the other. The loser could be BSNL, they felt, with the largest NLD network in the country.

However, some corporates could profit enormously by virtue of their current market profile, said the head of a basic telephony services company.

Send this article to Friends by E-Mail

Stories in this Section
DCA seeks details about Hutchison equity pattern

Reliance Comm signs long-distance licence
New telecom rules may hit NLD operators
Taib Bank set to exit Mindteck
A `big idea', but not good enough?
Escotel tie-up with Times Internet
TTK, BharatPlanet pact to provide services for NRI kin
HP launches IT lab in India
`Speech set to open up interface'
VeriFone ties up with TVS-E
HCL Insys launches online helpdesk

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line