The Hindu Business Line : AT&T set to come back into ILD services

The other players
In some cases such as Essar Hutch, the DoT is awaiting clearances from the Foreign Investment Promotion Board.
In others such as Tata Teleservices, the DoT has found the application to be incomplete.

New Delhi , Aug 8

The US telecom major, AT&T Global Network Services, is all set to make a comeback into the Indian telecom sector with the Department of Telecommunications in the final stages of giving its approval to the company's application for a long distance licence. AT&T has formed a joint venture company with Mahindras where AT&T Global holds 74 per cent equity.

AT&T's application had run into rough weather after the DoT received complaints that the company's sister concern, AT&T Communications, was offering services without proper licences and thus evading various taxes payable.

However, a committee, set up by the DoT to look into new applications for fresh licences, has observed that as per the existing laws, the Government could not hold back grant of new licences if the applicant or its sister concerns were being examined for any violations.

The two issues have to be de-linked and the committee has recommended that AT&T's application may be approved, said DoT sources. The formal approval is likely to come this week.

The foray in the long distance telephony segment signals a sort of a comeback for AT&T in the Indian telecom services market.

While the company has been offering its communication solution to the Indian enterprise segment for quite some time now, it has been keeping a low profile ever since it hived off its mobile division globally and later sold it of to Cingular.

AT&T Mobile was earlier a strategic investor in Idea Cellular along with the Tatas and Birlas. AT&T is also on BSNL's list of preferred long distance carriers.

The company will have to compete with the likes of Bharti, Reliance Communications, BSNL, VSNL and MTNL. The Government has so far given ILD licences to six companies and the NLD licence to nine companies, which include HCL Infinet, Power Grid, Tulip IT and RailTel.

Awaiting nod

Eleven other applications are awaiting approvals, which includes Tata Teleservices, Idea Cellular, Hutchison Essar , Dishnet and Spice Communication.

While in some cases, such as that of Essar Hutch, the DoT is awaiting clearances from the Foreign Investment Promotion Board, in other cases like that of Tata Teleservices, the DoT has found the application to be incomplete.

Both ILD and NLD sectors were a monopoly till April 2002, dominated by VSNL and BSNL respectively. At that time, per minute call rates were in the range of Rs 60 to the US and Rs 100 to the rest of the world.