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September 18, 1999
Five per cent cap sought on DLDC license feePrivate telecom operators have said the licence fee for domestic long-distance communication should not exceed 5 per cent of gross revenue.
The operators agree that the percentage could be slightly higher in metropolitan cities but argue that the entry fee should be waived in rural areas if teledensity is to be increased to meet the goals of the National Telecom Policy 1999.
S C Khanna, secretary general of the Association of Basic Telecom Operators, said revenue sharing for DLDC services could be just enough to cover administrative costs.
He said licence fee should be based on viability, considering a minimum rate of return for any worthwhile business proposition.
Partha Mukhopadhyay of the Infrastructure Development Finance Company said there should be no network obligation. Prices of the services should be totally independent of the licence fee so that they reflect the efficiency of an operator.
He said the licensing conditions should be kept to minimum checks of technical competence and sound finances.
B K Syngal, former chairman and managing director of the Videsh Sanchar Nigam Limited, said the selection criteria for domestic long-distance service providers should be based on technological superiority. This will result in creation of most efficient network resource, operational efficiency and low prices of services.
Speaking on regulation of facilities, Vijay Gupta of Reliance Telecom said the backbone network for DLDC operations should be open for competition and market forces alone should decide the dynamics of businesses.
All fixed service providers, cellular mobile service providers and DLDOs besides those entities that have the 'right of way' should be permitted to build a backbone network and lease it for voice and data communications.
But T V Ramachandran, executive vice-chairman of the Cellular Operators Association of India, said an absolutely free competition could prove to be disastrous for the industry.
He said the scope of DLD services should not include intra-circle DLD services.
Ramachandran said the existing licensed service providers, fixed service providers and cellular mobile service providers have already set up their infrastructure and have been providing intra-circle long-distance services.
If intra-circle DLD services were included, it would lead to more fragmentation of the market and effect the viability of existing players, he said.
About regional operators being allowed to interconnect over borders, the Federation of Indian Chambers of Commerce and Industry has said all agreements should be made under the guidelines of the TRAI.
"Full competition should be the ultimate objective but there should be limited competition for the first three to five years till the market reaches a maturity level," FICCI argued.
A minimum of two national and two regional DLD operators other than the Department of Telecommunications should be licensed to provide enough competitive environment. But there could be multiple operators within a region, FICCI suggested.
It said that only a basic telecom operator should provide state trunk dialling and public call office facilities.
However, the PCO owner should give choice to subscribers of choosing a particular DLDO or carrier.
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