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41 telecom licences lying unused

Thomas K Thomas

Of the 48 new licences issued by the government in telecommunications in the past year, only seven firms have begun to offer services. This is due to a lack of clear-cut regulations in critical areas like interconnection even as services like basic telephony have been caught in a legal wrangle over wireless in local loop.

While the ministry of communications can claim credit for speedy implementation of the objectives laid down in the New Telecom Policy 1999, including competition in long-distance telephony, Internet telephony, introducing the fourth cellular operators and unrestricted entry in basic telephony, much remains to be done on the regulatory front for customers to benefit from competition.

"The government has formulated the policy guidelines and issued licences. Now it's up to the operators and the regulator to sort out the operational issues," a senior ministry official said.

For instance, almost 10 months after they bagged the licences, the fourth cellular operators were not given frequency spectrum until last month.

Even new companies like Idea Cellular have not been allocated spectrum in Delhi. Sanjeev Aga, chief executive officer of Idea Cellular, said: "We were planning to launch services in Delhi by June. But since the spectrum has not yet been allocated to us by the government, we are not certain when we can foray into the Delhi market." Only Bharti has launched its services in Haryana, Uttar Pradesh and Madhya Pradesh.

In the case of national long-distance services, issues pertaining to interconnection and carrier access codes have held up the launch of private sector operations.

Bharti, which launched its national long-distance services in December, is carrying only cell-to-cell traffic, with those having a carrier access code at that. A legal dispute between the Telecom Regulatory Authority of India and Bharat Sanchar Nigam Ltd over STD traffic has not really helped matters.

While Trai is working on a reference interconnect agreement, most operators say the regulator needs to play a more active role.

"Under the market conditions, an agreement on interconnection and revenue sharing is a remote possibility. Trai must spell out the conditions for the operators," said Narendra Sharma, chairman and managing director of Mahanagar Telephone Nigam Ltd.

While the government had cleared the policy for international long-distance services in record time, none of the three licensees has begun operations since the sector was opened up in April. Here, too, issues like security clearance and the lack of a carrier access code have held back the rollout of services.

However, analysts point out that the Indian telecommunication market is in a nascent stage and will take some time to stabilise. "It is typical of a market like India to have niggling problems. Even in developed countries like the UK and the US, initially there were hundreds of disputes. To be fair to Trai, competition is something new to them. They will also learn as things progress," a telecommunication analyst said.

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