MNCs wary of entering long distance telecom

By Our Special Correspondent

NEW DELHI, JAN. 19. The Delhi High Court's judgment limiting the Telecom Regulatory Authority of India's (TRAI) has sent shivers down the spine of several world telecom companies who are planning to enter the national long distance (NLD) segment.

Representatives from some of the companies who have firmed up plans said they will have second thoughts about tapping the potential of this capital-intensive sector unless the anomaly created by the judgment was not eliminated. Among the companies who have lined up to take a shot at the NLD are MCI, AT&T, BT, Telstra and Deutsche Telecom. The TRAI has already given its recommendations on the terms and conditions for NLD companies and the final recommendation from the Department of Telecommunication (DoT) is awaited before setting the process for selecting companies in motion.

The Delhi High Court, yesterday, ruled that the TRAI could not mandatorily stipulate interconnection charges. It had also observed that the TRAI's adjudicatory powers can be revoked only when two service providers fail to reach an agreement. Companies are objecting on both the counts.

One, interconnection issues will be more dominant in the matter of long distance services. ``If the DoT could create so many hurdles in stalling the calling party pays (CPP) regime, one shudders to think what they will do if we enter long distance from where it gets Rs. 12,000 crores every year,'' said a representative who did not wish to be identified.

The companies feel with the TRAI not authorised to judge licenser-licensee disputes, they will face a tough time during the initial years of operation. ``The NLD operator will take seven to eight years to match his infrastructure with that of the DoT. During that period, the DoT will have to lease out its infrastructure on priority and at wholesale prices to their competitors. In the absence of an independent organisation, we are apprehensive how this can effectively take place,'' said another MNC representative.

On the second issue, companies feel consultations can take place between companies who have roughly the same market share. In India's case, the DoT owns 99 per cent of the infrastructure and will be in a position to dictate terms. ``Where is the question of arriving at an agreement. They can hold us to ransom,'' said a company official. ``In both cases, an independent body has to be a regulator,'' said an official.

Those solidly on the side of the TRAI in its hour of mortification are more strident and reject the suggestion about an independent dispute redressal mechanism. ``In order to ensure that NLD operators take off, the TRAI should be given all the powers of dispute redressal and tariff fixation,'' they feel. The judgment, they feel, does not account for the separation between the Government's role as a policy maker (DoT) and its role as a telephone operator (Department of Telecom Services -DTS).

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