Financial Daily from THE HINDU group of publications
Saturday, Dec 28, 2002
Info-Tech - Telecommunications
BSNL, cell players to pick up the gauntlet
NEW DELHI, Dec. 27
WITH Reliance Infocomm, the telecom venture of Reliance launching its limited mobility services - Indiamobile - promising to deal a death blow to competition, Bharat Sanchar Nigam Ltd (BSNL) and cellular operators are all geared to face the challenge head-long.
According to official sources, the top management of BSNL has held a series of meetings to chalk out a suitable strategy to counter the Reliance "attack" not only on its limited mobility services Tarang, but also on its cellular services launched a couple of months ago across the country. The first priority, of course, is to bring the Tarang tariffs in line with that of Reliance, even while working out other alternative plans to be one up on Indiamobile.
With plans to fan out to 58 cities across the country by end-December, the sources noted that BSNL's Tarang had the capacity to offer severe competition to not only Reliance, but also the limited mobility services of Tata Teleservices Indicom.
They noted that there was not much difference in the current tariff plans of BSNL and Reliance, especially if one takes into account the fact that a Reliance subscriber will have to make a long-term commitment and make a lump sum payment. The present four Tarang tariff plans on offer include a monthly rental of Rs 200 and handset charges of Rs 5000, apart from a security deposit of Rs 2,400 and registration charges of Rs 500. The customers, however, are billed at the rate of Rs 1.20 for every pulse of three minutes of outgoing calls, unlike Reliance, which is offering it at 10 paise for every pulse of 15 seconds. It was on this point that discussions were being held as to which would be the best method to counter Reliance's price plan, they said.
Meanwhile, mobile operators who have been opposing the limited mobility services all along too are getting ready to face the competition from Reliance.
According to Mr T.V. Ramachandran, Director-General, Cellular Operators Association Of India (COAI), all mobile operators would come out with suitable responses to the Reliance tariffs. However, it would be at a great cost to them, he noted.
"The existing cellular tariffs are already the lowest in the world, and almost all the operators are reeling under heavy losses. Any move to reduce their tariffs further will only affect their bottom line further," he said.
Denying charges that the cellular operators were trying to act difficult by refusing to reaching interconnect agreements with Reliance, which would enable connectivity between the subscribers of cellular operators and those of Reliance, he said that it was because the company refused to accept equitable terms of technical and commercial agreement.
For the limited mobility services, cellular operators have been demanding that Reliance should segregate its limited mobility and fixed line traffic by setting up separate junctions and circuits at its own cost. They have also sought that Reliance pay the cellular operators termination charges for routing the limited mobility calls. "Since cellular operators have to pay Rs 1.20 per call as termination charges to the incumbent operators, it is only right that Reliance also pays the termination charges to the cellular operators," he said.
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