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Rediff.com  » Business » STD, ISD tariffs will reduce by 9%

STD, ISD tariffs will reduce by 9%

November 10, 2005 23:32 IST
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Among a slew of user-friendly decisions for the telecom sector, the government on Thursday announced that with effect from January 1, 2006, players entering the national and long distance segments would have to pay Rs 2.5 crore as entry fee.

This major policy decision would lower STD and ISD tariff by nine percent.

It is a huge reduction for the telecom players as the existing license fee to enter the National Long Distance segment is Rs 100 crore and for International Long Distance is Rs 25 crore.

The move would encourage more players into the two segments, increase competition and eventually have spin-off benefit to customers by bringing the tariffs down.

Speaking after chairing the Telecom Commission meeting, Communications and IT Minister Dayanidhi Maran said voice-over-internet-telephony has been legalised. So far, net telephony was not permitted in India and it has been decided that access service provider can provide internet telephony, internet services and broadband services.

If required, access service providers can use the network of NLD/ILD service licensees. "Exisiting policies are restrictive in nature and consumers need choice," Maran said.

It has also been decided that from now, on prior experience in telecom sector will not be a prerequisite for being granted telecom service licenses.

The government has also decided to do away with IP 11 and IPVN licenses to promote faster net connectivity. Exisiting IP-11/IP-VPN licensees will be allowed to migrate to NLD/ILD service license.

Currently the NLD licences stipulates mandatory provision of setting up of a point of presence in each long distance charging area. It has been decided that there will not be any mandatory roll out obligations for future NLD license and exisiting licenses with immediate effect.

The net worth requirement of NLD licences is Rs 2,500 crore and paid up capital of Rs 250 crores is required.

In order to promote competition and induction of new players, the government has decided to reduce the net worth requirement and paid-up capital requirement of the applicant company to Rs 2.5 crore.

The NLD license providers cannot access the subscriber directly for provision of leased circuits/closed user groups.

In order to facilitate promotion of BPO industry, it has been decided that NLD service providers can access the subscribers directly for provision of leased circuits/CUGs and can provide last mile connectivity.

In the ILD sector, apart from reducing the entry fee, the government has decided to cut the annual license fee for ILD licenses from 15 percent to 6 percent of the Annual Growth Rate, with effect from January 1, 2006.

There is no need to have mandatory roll out obligation for ILD service licensees except from having at aleast one switch in India. The ILD service provider, Maran said, can access the subscriber directly only for the provision of leased circuits/CUGs.

The net worth and paid up capital of the applicant company for ILD service license will be Rs 2.5 crore, Maran said.

He said Internet service provider (ISP) with net telephony will be charged a licence fee at 6 per cent of AGR with effect from January 2006. The access providers can provide broadband services including triple lay-voice, video and data.

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