Trai seeks to end licence fees for leased int'l lines

Trai seeks to end licence fees for leased int'l lines
TIMES NEWS NETWORK[ MONDAY, DECEMBER 19, 2005 01:03:49 AM]

NEW DELHI: This could open the flood gates for international leased lines in India. The telecom regulator now wants to bring in competition in the international leased line segment by doing away with the licence fees altogether. The Telecom Regulatory Authority of India (Trai) has recommended that the government should allow any company to provide international leased lines without paying licence fee.

At present, only international long distance service providers can offer leased lines. Trai has argued that this will increase competition and bring down prices. International leased lines are used by software exporters, BPO units, banks and other financial service companies and internet service providers (ISPs). The success of broadband services also depends on good international connectivity of domestic service providers.

Currently, there are only three international leased line pr-oviders in India — Tata, Reliance and Bharti. In most developed markets, there are more than 30 leased line providers. This is one of the reasons the price of leased lines in India is one of the highest. “Prices in India should be based on competition. This is possible only if there is more competition in the market,” said a Trai official.

International long distance service providers have to pay a one-time entry fee of Rs 25 crore and an annual revenue share of 15% of the adjusted gross revenue. Trai has said that the government should not charge any fee if a company only wants to provide leased lines and is not interested in offering international telephony.

The regulator has also said the government should permit resalers in this business. The ILD sector was opened up for competition in ’02. Trai is of the view that the resale of leased lines should be permitted from ’07. It feels that five years are enough for the development of infrastructure.