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Thomas K. Thomas

New Delhi, April 17 The Government has given a clean chit to telecom companies outsourcing their network and IT requirements to equipment vendors such as Ericsson and Nokia Siemens. The issue was raked up by Tata Teleservices which alleged that Bharti Airtel had violated the licence norms by outsourcing network and IT management to foreign companies.

In a letter to DoT, the Tatas had said, “We understand that the payments for some of these elements made by the licence holders to the foreign companies are based on the total traffic generated on erlangs (a measure of usage of spectrum) basis, which amounts to the complete outsourcing of infrastructure.

“We request you to please advise us as to the clause of the licence under which this outsourcing is permitted and also whether we can also go ahead with this arrangement of giving access to active infrastructure and network to foreign companies, to manage and operate capacities on real time basis.”

In response, DoT said: “The licence agreement provides that the licensee can always employ or appoint agents and employees for provision of the service. Thus no prior permission of the Government is required for appointment of agents and employees for provision of service and appointment of franchisee to provide service.”

A number of GSM operators including Airtel and Vodafone have outsourced their non-core functions to other companies. For example, Airtel has a deal with IBM to manage its IT requirements.

DoT’s view on outsourcing is similar to its decision on the Tata-Virgin alliance wherein it had said that there was no violation of the licence agreement. The letter from Tatas was seen as counter to the GSM operator’s complaint against the partnership with Virgin Mobile.

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