The Hindu Business Line : MTNL, BSNL slugfest in basic services allowed

IN a dramatic reversal of stance, the Government has decided to allow public sector telecom majors Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) to compete with each other in basic service operations.

According to official sources, although the present guidelines stipulate that companies with a common promoter cannot operate in the same service circle, the Union Communications Minister, Mr Pramod Mahajan, has decided to allow competition between them in the ``larger interest of the consumer''.

Both the PSUs will now be able to roll out basic services in whichever circle they want. The stipulation regarding a ``common promoter'' was being made mandatory only for the private sector companies, they said. The officials pointed out that when applications for basic services were invited, MTNL had expressed interest in as many as 10 circles. The company had filed applications for licence in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamil Nadu, Haryana, Kerala, Punjab, Rajasthan and Uttar Pradesh (West) while BSNL wanted to roll out basic services in Mumbai and Delhi.

At that time, DoT had put on hold licences to these two PSUs. However, following a representation by both the PSUs, the department had decided to take a fresh look at it.

It may be recalled that the DoT had earlier rejected their proposals to bid for the fourth cellular licences in the 17 telecom circles and four metros citing the same rule.

At present, both BSNL and MTNL hold the third cellular licences. MTNL is the third licence holder in Delhi and Mumbai, while BSNL holds the licence in the remaining circles.

The officials said this was made mandatory for cellular services, where, it being a relatively new telecom service, DoT was keen to provide a level playing field to the private operators. However, in the case of basic services, Mr Mahajan felt that it would be unfair to bar the PSUs from leveraging their inherent strengths and capitalising on it.

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