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Decision on NLD services deferred

Our Bureau

NEW DELHI, July 13

THE full Telecom Commission on Thursday had to defer a decision on opening up of the National Long-Distance (NLD) telephone services owing to differences between representatives of other Ministries as well as the Planning Commission on the issue of numbe r of players that should be permitted in the sector.

While the Department of Telecommunications (DoT) had proposed limited competition by allowing only four private operators apart from the incumbent Department of Telecom Services (DTS) or MTNL (in Delhi and Mumbai), other members of the Commission were sa id to be in support of allowing free competition with open entry.

The next meeting of the Commission is expected sometime in August, sources in the Ministry said

The full Telecom Commission comprises members of the Ministries of Commerce, Finance and Industry and the Planning Commission. The Commission was slated to consider other modalities for private sector entry into the sector, including an upfront one-time entry fee payment comprising 10 per cent share of pre-determined revenue and a universal service obligation (USO) levy to be fixed by the TRAI.

Among the several steps that is aimed at discouraging non-serious players from bidding for service licences, the Government has proposed that the amount of entry fee of the highest bidder will have to be matched by the other three bidders. The bidding on entry fee will be the non-refundable portion of the entry fee. The refundable portion of Rs. 400 crores will remain the same for all the bidders and will be refunded in a phased manner on completion of the roll-out plan.

The Government was also planning to demand a higher amount of earnest money (to be decided by the Commission) in the form of bank draft from the prospective bidders. It is also proposed that amount of earnest money and the bid may originally remain valid for a period of 120 days from the date of submission of bids.

Among the proposals for which the Telecom Commission's approval has been sought is fixing the number of private service providers at four (i.e., DTS plus four other players).

The TRAI had earlier proposed free competition with open entry without any restriction on specific number of new entrants subject to pre-qualification and performance obligation. Subsequently, the newly-constituted TRAI agreed to a proposal to allow four plus one player.