India Telecom Take II: Basic Telecom Scheme

[January 30] Within four days of announcing guidelines for basic services coupled with the limited mobility bonanza, the bidding process for India’s new basic service licenses opened Monday with a bang.

The Department of Telecom (DOT) has received a whopping 52 applications from private companies for providing basic services in the 21 telecom circles.

According to industry observers, the rush to submit applications was on account of the fact that the DOT would allot basic licenses on a first come, first serve basis. Therefore, only the first four applicants will receive wireless licenses and the rest will have to provide basic services on wirelines–an area in which there is little interest, since wireless in local loop (WiLL) mobility is actually what the applicants want.

The companies who have applied for the license are Essar, for all the 21 circles, Hutchison in three areas, Bharti Group in eight areas, Reliance Telecom in 12 areas and Himachal Futuristic Communications Ltd. (HFCL) in seven areas.

Reliance, which is also rolling out its optic fiber backbone for long distance operations, has applied for a license to provide basic services in the circles of Delhi, Tamil Nadu, Karnataka, Maharashtra, Punjab, Andhra Pradesh, Haryana, Kerala, Madhya Pradesh, Uttar Pradesh (East), Uttar Pradesh (West) and West Bengal.

Until now private operators were offering basic services in only six circles, which included Bharti in Madhya Pradesh, Reliance in Gujarat, HFCL in Punjab and Shyam Telecom in Rajasthan.

Cellular operators have waged a battle against WLL mobility for basic operators. However, the Telecom Disputes’ Settlement and Appellate Tribunal (TDSAT) has favored that the new basic telecom licenses be issued as originally planned, even as the case against “limited mobility” is pending with the Tribunal.

However, as an interim relief to the petitioners, the Cellular Operators Association of India, the Tribunal has ruled that the new licensees for basic services shall abide by the judgment of the case as and when the Tribunal decides it. The next hearing for the case is scheduled for February 21, 2001

The government, in issuing the guidelines for basic operators last week, had thrown open the basic operations sector to unrestricted entry by private players. This was done with a view to end the monopoly of BSNL and MTNL, with the aim of increasing the teledensity of the country from three percent to 15 percent by 2010.

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