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Saturday, Mar 24, 2007
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Business Daily from THE HINDU group of publications Saturday, Mar 24, 2007 ePaper |
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Regulatory Bodies & Rulings Info-Tech - Broadband TRAI proposes unlimited bandwidth resellers Our Bureau
Key recommendations Rs 1 crore as entry fee No cap on the number of resellers 6% of revenues as licence fee FDI up to 74 per cent allowed Stringent security norms
New Delhi March 23 In a move that would improve the availability of cheaper international bandwidth in the country, the Telecom Regulatory Authority of India on Friday spelt out the rules for allowing unlimited number of bandwidth resellers in the country. Bandwidth resellers are companies, which do not own any infrastructure, but buy capacity from large international long distance service providers like VSNL or AT&T and then resell it to consumers like business process outsourcing units. The move will benefit larger consumers of bandwidth such as ITeS companies, BPOs and Internet service providers who will be able to buy bandwidth from the resellers at much lower costs. It will also benefit IT services companies as they will be able to expand their product portfolio by bundling international leased lines along with the services that they offer to their customers. ILD operators who can now ride on the resellers to increase their reach apart from getting assured business will also benefit. In countries such as Germany, there are 27 resellers offering international bandwidth compared to five licensed ILD operators. Similarly, in the US, of the 32 bandwidth providers, 26 are resellers, making bandwidth available at rock-bottom prices. TRAI has, howeve,r imposed an annual licence fee of 6 per cent of the revenues earned by the resellers in a bid to level the playing field with ILD operators. The regulator has also set an entry fee of Rs 1 crore for taking the licence for reselling. Further, conditions for Remote Access should be the same as applicable for ILD licence and the FDI limit should also be consistent with that of ILD sector at 74 per cent.
Retrograde step
According to Mr Mr Avnish Datt, Country Manager - India, Orange Business Services- a subsidiary of France Telecom, the decision to impose licence fee is a retrograde step. "While we welcome the TRAI recommendations, by imposing a licence fee on resellers, it results in double accounting since the ILD operators from whom a reseller buys capacity would also pay 6 per cent of their revenue earned from selling the bandwidth. TRAI could also have allowed 100 per cent FDI for resellers because most of the security-related issues have been dealt with," said Mr Datt. The TRAI recommendations will be vetted by the Department of Telecom before it is implemented.
More Stories on : Regulatory Bodies & Rulings | Broadband | IT-enabled Services | Outsourcing
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