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Regulatory framework in the Telecom Sector

In early 1997, the Telecom Regulatory Authority of India (TRAI) was established to regulate the telecommunication services and for matters connected therewith or incidental thereto. The establishment of the Regulator was considered necessary in the context of liberalisation and private sector participation in the Telecom Sector and to provide a level playing field for all operators.

With the opening of Telecom sector to private investment and establishment of an independent regulator, the matter of separation of service provision functions of the Department of Telecommunications (DOT) and providing a level playing field to various service providers including the government service provider, has been achieved. By amendments made to the TRAI Act, the entire telecom regulatory framework, including the disputes settlement mechanism were strengthened.

Tariff Rebalancing Measures

In response to the policy changes in the Indian Telecom Sector, the tariff structure has been altered substantially. The Telecommunication Tariff Order (TTO) 1999, issued by the Regulator (TRAI) had begun the process of tariff rationalisation with an increase in monthly rental and decreasing STD and ISD tariffs. This rebalancing exercise was implemented by TTO 1999 in three steps, regaining with the first phase in May 1999 and the third from 14 March 2002. This resulted in a reduction of NLD and ISD tariffs considerably.

In the area of cellular telephony also, the tariff rates have decreased substantially and the regime of Calling Party Pays (CPP) is already in practice. TRAI is continuously engaged in tariff review exercising for rationalising the tariff structure which is expected to result in further tariff rebalancing. The new initiatives taken by TRAI in the telecom sector to achieve the set of objectives include issuances of orders on interconnection usage charges, monitoring the quality of services of all service providers, conducting an objective survey on Quality Of Service (QOS) parameters of basic and cellular service in different circles through an independent agency, finalisation of the System of Accounting Separation (SAS) and deregulation of tariffs for cellular mobile services under certain conditions.

Grameen Sanchar Sewak (GSS) Scheme

It is a pilot scheme launched on 24 December 2002 by the Prime Minister through Grameen Dak Sewak Delivery Agents (GDSDA) of the Department of Posts (DOP), attached to the rural post offices, who are willing to work as franchisee for BSNL on the existing STD/ISD/PCO franchisee basis. In this scheme, GDSDA volunteers are called Grameen Sanchar Sewaks (GSS), who carry a mobile fixed wireless terminal (FWT) with display unit in a carry bag and visit door to door to provide telephone facility to the rural population in his routine beat in the villages.

Basic Services

Based on the recommendations of TRAI, the Government announced guidelines on January 25, 2001 for issue of licences, with unrestricted open entry, to new Basic Service Operators in all the Service areas including the six service areas where private licencees already existed. India is divided into 21 territorial service areas for the grant of Basic Service licence. The Basic Service Operators are permitted to carry their own long distance traffic within their ser vice area.

Introduction of Unified Licencing Regime

Consequent to the acceptance of recommendations of TRAI by the government on October 31, 2003, an addendum to the NTP-1999 was issued by the Department of Telecommunications including the Unified Licence for telecommunication services and licence for Unified Access (Basic and Cellular) service.

National Long Distance Service

National Long Distance (NLD) service was opened to the private sector from August 13, 2000. Indian registered companies having a net worth of Rs 2,500 crore and paid up equity of Rs 250 crore are eligible to apply. There is no restriction on number of operators. An NLD operator can carry inter-circle traffic in India. The licence for NLDO is issued on non-exclusive basis, for a period of 20 years and is extendable by 10 years at one time.

International Long Distance Service

The International Long Distance (ILD) service is basically a network carriage service, providing international connectivity to the network operated by foreign carriers. In accordance with the New Telecom Policy 1999, the Government opened the International Long Distance Service from 1 April 2002 to the private operators. There is no restriction on the number of operators. The Indian registered companies having a net worth of Rs 25 crore are eligible to apply. The licence is valid for 20 years from the date of licence agreement.

Infrastructure Provider Category - II (IP-II)

An IP-II licencee is permitted to lease/rent out/sell end-to-end bandwidth, i.e., digital transmission capacity capable of carrying a message. This was opened to private sector from 13 August 2000. The licence is valid for 20 years from the date of licence agreement.

Infrastructure Provider Category -I (IP-I)

The applicant company for IP-I requires registration only with DoT. Companies registered as IP-I can provide assets such as dark fibre, right of way, duct space and tower. All Indian registered companies are eligible to apply.

Cellular Services

India is divided into 19 Telecom Circles Service areas and four Metro Service areas for the Cellular Mobile Telephone Service. There are three private operators and one state-owned operator in each service area. At present there are over 27 million cellular subscribers and are growing at the rate of over one million per month.

Unified Messaging Service

New policy for Voice Mail/Audiotex Service, in terms of NTP-1999, was announced in July 2001 by incorporating a new service, namely, Unified Messaging Service (UMS). UMS is a system by which voice mails, fax and e-mails (all three) can be received from one mail box using telephone instrument, fax machine, mobile phones, internet browsers etc.

Policy for Public Mobile Radio Trunk Service

Policy for Public Mobile Radio Trunk Service (PMRTS) in terms of NTP-1999 was announced on November 1, 2001. The new PMRTS licences are being granted in digital technology only. PSTN connectivity is also permitted to PMRTS service.

Global Mobile Personal Communication by Satellite

Policy for grant of licence for Global Mobile Personal Communication by Satellite (GMPCS) service in terms of NTP-1999 was announced on November 2, 2001. Detailed Information about these services is available on the websites of the department.


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