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Saturday, Jun 08, 2002

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Competition lines cut

THE DELAY IN Bharti Telesonic and Data Access obtaining security clearances for the launch of international long distance operations has ended up denying consumers the long awaited choice in ILD services. Consequently, two months after the termination of the Videsh Sanchar Nigam's monopoly over ILD, the entry of private operators in this segment remains stymied. While there were enough indications that the issue of security clearance would stall the process of ushering in competition, the war clouds over the sub-continent have come in as a convenient excuse now.

This delay in offering security clearances is a double-whammy for consumers: One, both Bharti Telesonic and Data Access had proposed to offer ILD services at 40-50 per cent rebate to the VSNL rates to give the latter a run for its money. But this delay has effectively deprived consumers of lowered tariffs. Two, this delay will extend the monopoly of VSNL in ILD for another two-three months. This means VSNL can defer lowering ILD tariffs which it may have done in response to the tariff plans of the private players. All this is mainly because of the failure of the Government and the Telecom Regulatory Authority of India to lay down a well-defined timetable for security and other clearances. Even though it may seem quite late in the day, intervention by TRAI, as the apex telecom regulator, on this issue seems to be in the fitness of things. Unless TRAI draws up a timetable for security and other clearances, in consultation with the Government, such needless and whimsical delays may continue to plague the launch of different telecom services. The picture has been no better vis--vis the entry of a single private player into national long distance services, launched earlier this year. While the consumer has definitely benefited in terms of lowered STD tariffs, the relative lack of clarity on carrier pre-selection and the absence of properly drafted interconnect agreements (which is likely to be finalised by TRAI over the next couple of weeks in consultation with NLD and other players) has marked a slow take off of NLD services. Till other private NLD players enter the fray, it is unlikely that the optimum benefits of competition will fully percolate to consumers.

Finally, for all the good intentions of the Government and the regulatory authorities, the benefits flowing to the consumer in the telecom arena have been more by default than by design. The bureaucratic interference and capricious decision-making by the Government have only ensured that the promised land of "manifold choice in services" at "affordable tariffs" in telecom remains far away for the Indian consumer.

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