The Hindu Business Line : BT plans long distance telephony

Telecom major British Telecom is planning a new joint venture to launch long distance telephony services in the country. The company, one of the largest operators in Europe, has got the nod from the Finance Ministry and will invest close Rs 8 crore to launch both national and international long distance services in the country.

BT's entry will heat up the competition in the long distance segment. A dozen Indian companies, including Internet service providers Sify, Hughes Escorts Communication and Net4India, are also making a rush for acquiring new licence.

The others in the list which have expressed interest in foraying into the long-distance segment include mobile operators Idea Cellular, Essar-Hutch, Spice Telecom, MTNL, Tata Teleservices and utility majors GailTel, RailTel and PowerGrid.

The beeline for national long-distance (NLD) and international long-distance (ILD) licence comes after the Communications Ministry reduced the entry fee to Rs 2.5 crore. Earlier, operators had to pay Rs 100 crore for an NLD licence and Rs 25 crore for an ILD licence. The licence fee was brought down from 15 per cent to 6 per cent of the annual revenues. The rollout obligations have also been eased out.

At present, there are only four companies in the NLD and ILD segment. They are Bharat Sanchar Nigam Ltd, Videsh Sanchar Nigam Ltd, Bharti AirTel and Reliance Infocomm. Information technology research and advisory company Gartner had pointed out that competition in the long-distance segment was low in the country, which was keeping the tariffs of bandwidth very high. In countries such as the US there are more than 20 long-distance operators offering services.