M A I N   N E W S

Price war enters ISD arena
Reliance Info may cut rate to Rs 6

New Delhi, January 23
Yet, another front has been opened in the ongoing price war in the telecom sector with the battle now spilling over to the international long distance arena.

Against the backdrop of plans by cellular operators to slash their international long distance rates to nearly half from Rs 24 per minute to Rs 12 to the USA, Reliance Infocomm, is likely to bring it to Rs 6, a new low in the ISD tariffs.

Reliance, Bharti and DataAccess are the key players other than VSNL that have licences to offer long distance traffic. The Reliance move could force VSNL, which is a Tata group company, BSNL and MTNL to reduce their tariffs. VSNL shares its current revenue of Rs 24 per minute with BSNL and MTNL. With the tariff war hotting up, this share is likely to go down, an industry source pointed out.

The cellular operators had earlier announced a reduction in domestic long distance charges for calls among cellular phones to Rs 2.99 per minute plus airtime.

Reliance plans to charge 40 paise per minute for calls between its own subscribers anywhere in the country. It also plans to charge 40 paise for local and STD calls (additional charges payable to other operators will be applicable) to other operators if the call occurs in the first 400 minutes of airtime and Rs 1.90 per minute for STD calls (plus additional charges payable to other operators) beyond 400 minutes.

However, with TRAI planning to put in place a new interconnect regime, Reliance will have to pay access charges in addition to the 40 paise for local calls to other operators, making their calls more expensive than the proposed one.

Meanwhile, the Association of Basic Telecom Operators (ABTO) shot off another missive to TRAI chief M.S. Verma, saying that the bogey of licence fee raised by the cellular operators is baseless. The association said the actual amount paid by the cellular operators in 2001-02 was only Rs 104.11 crore and not Rs 1,007.47 crore from the two operators, Airtel and Hutch, in Delhi alone.

Figures were inflated in other circles too, ABTO chief S.C. Khanna said.

Basic operators asked TRAI to look into these figures and said the cellular industry does not deserve any more largesse from the government or the regulator.’’ Especially not if it is at the expense of the basic telecom industry ...’’. UNI