Segment Analysis: Basic Services

Despite the positive recommendations of the NTP ’99 for the

Fixed Service Providers (FSP), things did not move as expected in the basic

services’ area last year. There was only one addition to the list of basic

services provider in the country. The addition was Tata Teleservices, which

started its operation on 31 March 1999. In a very short period of about a year,

it increased its tally to 35,000 subscribers. It was way ahead of Hughes

Tele.com, which had a subscriber base of 22,000. The third private operator in

the area is Bharti Telenet. As of today, the total installed capacity of DELs in

the country stands at 266.55 lakh. Out of that the Department of Telecom (DoT)

has installed 265.1 lakh and the three private operators have together installed

1.45 lakh.

The Private Operators

Due to the very infant nature of private basic services, DoT

still continues to remain as the dominant basic service provider with 99.54

percent connections while the private operators contribute a mere 0.55 percent.

Unfortunately, the private operators have failed to realize

the business potential of rural India. They concentrate on the "more

lucrative" cities while laying their infrastructure. Their misplaced

optimism on the urban sector has made them forgo their commitments to rural

areas. According to Government policy, 10 percent of the total connections given

by the private operators have to be in rural areas. In the six states where

licences were given, the total Village Public Telephones (VPTs) to be installed

by private operators were 84,040. Till date, these operators have provided only

a pathetic 12.

Bharti Telenet

Bharti Telenet is India’s first and the largest private

telephone service network in India. Ever since the launch of its service in

Indore on 4 June 1998, the company has expanded its network to over 22 cities

and towns of Madhya Pradesh. AirTel plans to connect the entire state by its

3,500-km fibre optic transmission network for providing broadband and Internet

services to its customers. 2,100 km of that has already been laid.

The company has joined hands with Bharti BT Internet to offer

free Internet service to AirTel subscribers in Madhya Pradesh. To avail of the

service, subscribers will have to dial 1500 and fill an online form. After that

they can surf the Net for unlimited hours at the rate of a local phone call.

Hughes Tele.com

Having started its operations in October 1998, Hughes

Tele.com is planning to be the first private telecom services company to go for

IPO in the country. The IPO will also be one of the biggest infrastructure

issues and will be worth Rs 891 crore. The company is providing broadband access

and applications to consumers and it plans to take its high-speed fibre optic

network right to the customer’s office or home with Web applications. Having

taken the "A" category ISP licence, Hughes plans to provide services

like videoconferencing, Web hosting, digital network services, and e-mail.

Next>>>>

With fibre-to-business/home, the company plans to offer

Virtual Private Network (VPN) and digital data services. The focus would

primarily be on corporates, but also on multiple line residences and PCOs. It is

planning to go for Intelligent Network (IN) to provide value-added offerings

such as premium rate services, Calling Party Pays (CPP), home shopping, and

entertainment options.

Next>>>>

The company has presently three switches at Navi Mumbai,

Worli, and Pune. Plans are to cover 2,20,000 lines in couple of years and over

five million lines in the next 15 years.

Tata Teleservices Ltd

Tata Teleservices Ltd launched its services on 31 March 1999

and has 35,000 subscribers at present. The company started its services in

Hyderabad and then followed it up in Vijaywada. To meet the initial rollout

commitments of 50,000 lines in the first year of operation, it has gone for

Wireless in Local Loop (WILL) based on CDMA technology.

The company is presently offering services like alarm

service, STD locking to call management features such as call waiting, three-way

conference, call forwarding, CLI, Centrex, ISDN, leased-lines, and E1s. It is

planning to launch voicemail, PBX with DID, and toll-free lines in the coming

months.

Others

Reliance Telecom has started its service in a limited way in

Jamnagar. Shyam Telelink has recently started services at Jaipur and Jodhpur.

Even Essar Comvision will start its services in Punjab by the end of this

fiscal. In the Haryana circle, the DoT is in legal tangle with HFCL. In the rest

of the state circles, there would be a re-tendering and the entire process

should be over by the end of this fiscal. And logically it should happen before

the Domestic Long Distance (DLD) policy is announced.

The report of the Committee on Rural Communication, set up in

November 1999, was presented to the communications minister recently. The

committee was established to look into the problems of development and operation

of rural telecom services, especially VPTs, technology options, material

requirement, etc. The major recommendations of the committee are:

• WILL for rural telecom with a range of about 25 km to be
  
  inducted throughout the country. Speed up the procurement process of WILL
  
  equipment.

• Suitable systems for satellite terminals to be selected
  
  and procured at the earliest.

• New VPTs should have STD facility and the existing VPTs
  
  to be upgraded for the same.

• Faulty MARR systems to be repaired and unserviceable
  
  systems to be replaced. Status report to be obtained within two months.

• DTS should facilitate so that VPTs are upgraded to Public
  
  Tele Information Centres/Information Dhabas progressively.

The Government has now given 15 August 2001 as the deadline for providing

VPTs in all the villages of India. To make basic services accessible to the

common man in the remotest parts of India and to meet the targets on the tele-density

front, the contributions of private operators will be important.