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June 23, 1999
TRAI has multiple plans for opening
The national long-distance market may be opened up on a regional basis to existing cellular and basic companies first.
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This will help avoid a situation where several companies start laying new optical fibre capacities all over the country.
TRAI recently received a comprehensive report on the long distance market from Tata Consultancy Services.
According to the report, the market would continue to be lucrative for the monopoly long distance operator, the Department of Telecom even if 15 per cent of the business is snatched away by private competitors.
But, however, lucrative the market, the field is likely to be restricted to a handful of players, say TRAI officials.
TRAI is, in fact, contemplating immediate opening of the market on a regional basis to existing players who could quickly establish handover agreements to terminate calls among themselves.
For instance, the four southern states of Kerala, Karnataka, Andhra Pradesh and Tamil Nadu could constitute a region.
One of the advantages of this structure would be quick ramp-up of service, which is important if the government wants private competition in the business from January 1, 2000.
This would also give companies the time required to build national capacities in time for the eventual opening up of that market.
TRAI's recommendations on the terms of the licences will be issued after consultations with the government, industry and public, based on which DoT will finalise the policy.
The National Telecom Policy 1999 stipulates that the terms of the DLD licences must be announced by August 15, 1999.
Even as DoT awaits recommendations of TRAI on the terms of entry of private operators into the DLD market, the department is firming up ideas of its own.
One, the long distance players should focus on carrying traffic between telecom circles (mostly contiguous to states).
Even if DLD players build long distance infrastructure, they will not be allowed to carry traffic within a circle. This will be the exclusive privilege of the private basic services providers who are licensed on a circle-wise basis.
The DoT would also like the policy to give consumers the freedom of choice to dial through any long distance service provider. Officials say that ideally, the consumer should be able to choose both the basic service provider and DLD company directly.
This would be facilitated by a telephone numbering plan that would enable users to dial up to the nearest 'point of presence' of the DLD company of their choice. Such a plan, if implemented, will enable users to change their DLD company with considerable flexibility, depending on the tariffs offered.
This will bring about greater competition and enable complete play of market forces, say government officials.
- Compiled from the Indian media