Financial Daily from THE HINDU group of publications
Tuesday, Nov 15, 2005
Info-Tech - Telecommunications
GAIL to acquire licence for STD services
New Delhi , Nov. 14
COMPETITION in long distance telephony market is hotting up with the state-owned GAIL (India) Ltd today saying that it plans to acquire a licence for offering STD services across the country.
The move comes within days of the Union Government relaxing the entry fee and roll-out norms for new NLD operators.
Stating that the Government has rightly come out with the new condition, senior GAIL officials said that the company had plans to tap the Rs 80,000-crore telecom market by acquiring an NLD licence.
OFC network: At present, GAIL has an Infrastructure Provider category II licence, which enables the company to offer optical fibre cable (OFC) to NLD operators. GAIL had recently signed a memorandum of understanding with other state utility PSUs - PowerGrid and RailTel - to create the second biggest optical fibre network with a reach of 60,000 km.
Acquiring an NLD licence is a logical step and now the company can use this nationwide network for its own operations.
An NLD licence would also enable GAIL to provide virtual private network (VPN) service for corporate customers. The company has already connected 500 business houses, which are currently buying natural gas, with the OFC network.
Right of way: One of the advantages that GAIL has, compared to private telecom operators, is its `Right of Way' (RoW) which allows the company to lay cables without seeking consent from local authorities across the country.
GAIL officials said that permitting the provisioning of leased circuit/close user groups to NLD service provider will open up the entire corporate sector, which is interested in setting up its own company-wide private telecom network.
Deal with VSNL: GAIL has sealed a major deal with VSNL, wherein it has bought the lifelong rights for use of fibre from VSNL in southern India connecting all major cities such as Bangalore, Chennai, Mangalore, Madurai, Kochi, and Coimbatore. The expansion will extend GAIL's OFC network from the current 8,500 km to 13,000 km by January next at a cost of Rs 30 crore.
Besides, in order to avail itself of the opportunity in the latest NLDO guidelines (i.e. permission to connect end subscriber through leased circuit/close user group), GAIL has tied up with its City Gas Joint Ventures for laying OFC. Initially a total of about 500 km of city network will be created with these joint ventures, whose replacement costs if laid alone would be Rs 75 crore.
The Union Minister for IT and Communications, Mr Dayanidhi Maran, had last week announced reduction in the entry fee for a new NLD licence to Rs 2.5 crore.
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