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Trai may rework interconnect norms if licences are merged

Thomas K Thomas in New Delhi | July 25, 2003 12:00 IST

The Telecom Regulatory Authority of India may have to rework the interconnect charges between operators, scheduled to be finalised by July 31, if a proposal to merge the service licences of telecom operators come through.

Speaking to Business Standard, Pradip Baijal, chairman, Trai said: "We may have to take a relook at the interconnect norms under a unified licence regime. All such issues, including the path to migration to the new regime, will have to be discussed with stakeholders when the consultation on unified licence takes place."

Under the existing interconnect charges, revenue sharing is specified between cellular, basic and long-distance operators, while the unified licence seeks to blur differentiation between various types of service providers.

Under the unified licence regime, operators will be allowed to offer any type of service that will bring down their costs. Therefore, the revenue share for interconnecting between various operators will have to be reworked.

Refuting criticism that the regulator was side stepping the Convergence Bill, which is pending in Parliament, the Trai chairman said unifying the licences would help in implementing the legislation. "The Convergence Bill is not even finalised, while the need of the hour is a unified licence. Even as the bill takes its own time to become a law, we can in the meantime move a step closer to a converged regime."

Baijal, however, ruled out any modifications in the consultation paper that proposed the merger of cellular and basic service licences. "While the scope of the paper remains the same, Trai is open to any new suggestions, including that of merging long-distance service licences with cellular and basic licences. Since the matter is only at a discussion stage we have to be open to any suggestion. We will give our recommendations after taking all the views into account."

In a letter to Trai last week, cellular operators had said the consultation paper used the narrowest possible definition covering only cellular mobile and basic services, leaving out long-distance services.

While the cellular operators are happy with the latest developments, industry sources pointed out that if Trai did too many flip-flops and kept reviewing its decision, it would become difficult for the operators to plan out their growth strategies.

Trai has already gone back on the interconnect norms twice and has delayed the consultation process on unified licensing.

Analysts said the regulator would have a tough time in tackling these issues.

Trai is attempting to work out too many things simultaneously. Since a lot is at stake the regulator will first have to take a step at a time and then include the industry in its decision-making," an analyst said.

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