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STD rates may touch Ground Zero

Thomas K Thomas in New Delhi

National long-distance rates are set to go down further with Reliance Infocomm assuring the Telecom Regulatory Authority of India that its interconnect charges for other cellular and basic operators will enable them to offer domestic long-distance calls at 20 paise a minute.

In its earlier submission to Trai, Reliance Infocomm had offered the same rate but to its own customers. The current average rates for national long-distance are Rs 9 a minute.

"We are looking at creating a level playing field, and Reliance's national long-distance arm has agreed to offer the same interconnect terms and conditions to other operators," Trai chairman M S Verma told Business Standard.

The proposal, if approved by Trai, will have an adverse impact on Bharat Sanchar Nigam, which has a near monopoly in the market.

"BSNL lost around Rs 3,000 crore (Rs 30 billion) in revenue after bringing down its tariff from Rs 24 to Rs 9. The latest proposal from Reliance will be a big blow for the public sector major," said a telecom analyst.

BSNL officials said the public sector unit would have to match Reliance's tariffs despite the revenue implications.

Bharti Telesonic, the other national long-distance operator, will also be affected, with other private cellular operators saying they will move to Reliance's network if such low tariffs are offered.

"If the Reliance offer is at 20 paise a minute, we will waive our part of the revenue share and offer national long-distance calls at 10 paise to our customers," said a senior cellular industry representative. At present, cell operators are routing calls through Bharti's network.

Senior Bharti officials, however, said while Trai would be unfair if it accepted Reliance's tariffs, Bharti would have no option but to match them.

"While BSNL is sitting on a Rs 12,000 crore (Rs 120 billion) national long-distance market, we have about Rs 50 crore (Rs 500 million) of business, so we will not be impacted much," said a senior Bharti official.

Verma also said Trai was likely to take a decision on the tariffs for wireless-in-local-loop limited mobility proposed by Reliance. "Let Reliance prove that the tariffs are not predatory and that they are based on costs. Then we have no problem," he said.

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