The Telecom Regulatory Authority of India is considering a proposal for differentiated regulation of integrated and stand-alone telecommunications service providers.

Differential regulation will mean operators like Spice, Escotel, Hutchison and HFCL, which offer only one type of service, will face easier roll-out obligations and service conditions than companies like BSNL, Reliance and Bharti, which offer cellular, fixed-line and long-distance services.

At present, the regulatory framework is based on the type of service offered and not on the operators' size.

According to the proposal mooted by the economic division of the TRAI, differentiated regulation is needed to create a level playing field for integrated and stand-alone operators.

"It is easier for an integrated player like BSNL to bundle tariffs because it is present across a wide spectrum of services. Stand-alone players have no such cushion," an analyst said.

"The time is perhaps opportune to look at differing paradigms of regulatory scrutiny for integrated versus non-integrated stand-alone players," a TRAI paper notes. An information paper will also be floated on the issue if the TRAI board approves.

The TRAI's economic division has also suggested a review of the basic telecom service providers' licence with differentiated regulation of wireless-in-local-loop mobile and fixed-line service providers.

At present, the basic service licence treats WLL mobile and fixed-line services alike.

The telecommunications industry had earlier asked the TRAI to follow "asymmetric regulation" of BSNL and MTNL.

The state-owned firms, by virtue of controlling 95 per cent of the market, would have faced more stringent regulation.

However, the proposal floated by the TRAI's economic division includes large private service providers as well.

Analysts said the move could open another front in the telecommunications battle with the big operators opposing the move and smaller ones supporting it.

The new plan

Gainers:

• Stand-alone operators like Escotel (cell), Hutchison (cell), BPL (cell), Spice (cell), RPG (cell), Airtel (cell), HFCL (basic).
• These operators may face easier rollout obligations and service conditions.

Lossers:

• Integrated players like BSNL, Reliance, MTNL, Bharti and Tata Teleservices.
• TRAI proposes stringent regulations for such firms to create a level playing field with stand-alone operators.