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MTNL, BSNL in long distance talks

G. Rambabu

Shaji Vikraman

NEW DELHI, Oct. 11

PUBLIC sector telecom majors Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) are in talks to form a joint venture for offering international long distance services once Videsh Sanchar Nigam Ltd. (VSNL) monopoly ends in April 20 02.

According to highly-placed officials, a committee of directors has been formed which will look at the viability of the proposal. It will also be looking at the various other business opportunities that can be exploited by both the public sector undertaki ngs (PSUs), especially in the international arena.

``The committee will be particularly looking at the business opportunities that can be exploited such as value-added services and consultancy projects in other countries. Only one meeting has taken place so far. More such meetings are scheduled, after wh ich the exact equity structure of the joint venture and other financial details will be firmed up,'' they said.

The officials noted that once the details are finalised, the Government will be approached for its approval.

``As we see it, the Government should have no objection at all. This is different from the other domestic telecom ventures such as basic and cellular services, where public sector companies have not been allowed to compete against each other. Long distan ce service is a different aspect,'' they said.

In this context, they pointed out that MTNL, Telecommunication Consultants India Ltd. (TCIL) and VSNL have already formed a joint venture with Nepal Ventures Private Ltd. to provide basic services based on wireless in local loop (WLL) technology in Nepal .

The officials noted that VSNL will be divested of the Government control by early next year. The Telecom Regulatory Authority of India (TRAI) is also due to come out with its recommendations on ILD by end-December.

The main issues that will be sorted out are the terms and conditions of licences, nature of competition to be allowed, selection criteria, structure of the licence fee and the technical issues involved.

Of particular interest will be the type of competition that TRAI would recommend - whether to have only operators which own network facilities or also allow resellers of international bandwidth; whether to limit the number of ILD service providers or to allow open competition without any limits on the overall number of operators.

The third issue is the time period over which competition should be introduced, the selection criteria to be specified, whether entry should be allowed through an entry fee subject to bidding and entry should be allowed to only those with a proven track record.

As of now, the authority has specified that the licensee should have a sound financial background. In a joint venture, there should be a requirement that a minimum specified level of equity should be with those with adequate experience. Both MTNL and BSN L in any case fulfil these minimum requirements, the officials said.