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September 6, 1999
Competition in telecom infrastructure called forThe Associated Chambers of Commerce and Industry of India has called for inducing open competition among telecom infrastructure providers and amendment in the TRAI Act to bring them under its purview so as to free them from the licensing "clutches" of the Department of Telecommunications.
ASSOCHAM Telecom Committee Chairman P K Sandell has suggested that pure infrastructure owners should be regulated to a certain extent by broad guidelines of a national infrastructure policy so that they meet the minimum quality of service and timeframe within which they should provide the promised infrastructure.
TRAI, or a committee comprising representatives of TRAI, finance ministry, commerce ministry, etc, under TRAI should monitor the progress of the plan.
The rollout plan should be such that infrastructure providers not only take care of non-lucrative routes but also cater to the demand of non-lucrative routes.
Wherever possible, if agreed to by the parties concerned, sharing of infrastructure should be explored.
Emphasis may be on the use of indigenous equipment, transmission media. If the state-of-art equipment is not available locally, import of such products should be facilitated.
The entry barrier for infrastructure providers should be in the form of a performance bank guarantee only.
The amount of bank guarantee may be related to the first three years. This amount may be subsequently modified if the investment exceeds the proposed plan.
The entry fee for service providers should be a suitable percentage of investment plan and revenue projected.
Sandell also said that due to the relative unattractiveness of eastern region, the nation-wide / regional infrastructure providers should provide the infrastructure for the operators in the eastern region, thus reducing the investment exposure of operators from this region.
As the revenue sharing mechanism will be adopted, the operators from this region will be almost at level playing field with relative less investment in the infrastructure and availability of state-of-art telecom infrastructure will in turn ensure rapid growth in the region.
The government should also provide special concession to infrastructure providers / operators in this region for a few years initially to make the investment attractive.
Regarding the usage of backdown network for national long-distance data and voice communication limited to entities specifically mentioned in the National Telecom Policy '99, Sandell said it should not be limited to entities specifically mentioned in NTP because the entities mentioned have been planning to enter into this segment for quite some time but till now no fruitful work has been done by them.
Secondly, most of these entities are government departments of PSUs who will either do this work directly or through a joint venture. If they want to do it themselves then the problem is that they do not have sufficient experience and secondly there is paucity of resources to fund and manage such projects.
The second option is through the joint venture route. However, there are many instances where PSUs have taken non-compromising stances, which make the formation of joint ventures impossible or workable.
Since these entities have the backbone it does not mean they are automatically eligible for providing service and infrastructure. As an example, railways have the backbone but their optical fibre cable network is hardly 1,500 km.
If the plans of the railways for auctioning these routes do no fructify, as has happened with its previous tenders, then the whole process would get delayed.
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