Renewed dynamism in Indian telco market

(Last Updated On: November 14, 2006)

For those of you who may have followed the Indian telecom industry closely before, even pre-TRAI days had efforts to open up circles in India to competition which brought many interesting telcos from around the world into India. Without an independent regulatory body, there was much uncertainty, litigation, etc and many were burnt from this experience. Developments were a little slower after that since the formation of TRAI, and despite there still being loopholes over the jurisdiction of TRAI and DOT, the telcom industry in India has been heating up. Interesting strong domestic players however sprung up.

VSNL has, with the acquisition of Teleglobe, become one of the world’s largest carriers of international voice complementing its emergence as the largest provider of submarine cable bandwidth. VSNL has a global presence including operations in USA, Canada, UK, South Africa, Singapore, Sri Lanka and India making it the first Indian truly global telecommunications company. Reliance Communications (RelComm) and Bharat Sanchar Nigam LTD (BSNL), two of the country’s largest telecom operators with a combined subscriber base in excess of 8 crore, have signed an agreement to inter-connect each other’s toll-free numbers that come under the 1800-category. more details

Meanwhile, foreign investors such as SingTel entered the Indian market via domestic players, although there was however a foreign investment rule that existed limiting foreign ownership to 49%.

In November 2005, the government decided to allow telecommunication operators in India to increase foreign investment ownership up to 74% from 49%. There are conditions on this such as prohibition on foreigners from heading any telecom company. Plus, there are other security-related conditions like not allowing remote access to any telecom network. The industry was given a year to comply if they did not fulfil the conditions. Tata Teleservices is headed by Daryl Green who is not Indian, ans so they are appealing these rules. The Union Caninet has extended the deadline for compliance to the end of the year, and DOT is pushing to have some security clauses relaxed. read full aricle

Unlike past efforts dating back to the 90s where there were attempts to bring in foreign investment and competition, and despite the overlaps still between DOT and TRAI, things seem to be more favourable and things are moving in India. To add to the other information on my previous post on the Indian wireless revolution, British Telecom has now received Foreign Investment Promotion Board clearance to offer an array of telecom services BT Group PLC said today that it has applied for licenses to offer national and international long distance services in for more

Meanwhile, in a bid to increase competition in the international long-distance (ILD) segment, the Telecom Regulatory Authority of India (TRAI) has urged the Government to make it mandatory for operators in the country to share the infrastructure on their respective landing stations.