TRAI recommends resale of bandwidth

NEW DELHI: Telecom regulator TRAI has on Friday proposed an entry fee of Rs one crore and a bank guarantee of the same amount for operators to be allowed for buying bulk bandwidth from international long-distance telecom companies and selling it to end users such as banks, IT firms and BPOs.

In a bid to promote competition in resale of bandwidth, the Telecom Regulatory Authority of India in recommendations submitted to Department of Telecom has favoured not fixing any cieling on the number of players in the segment.

If accepted, the proposal would encourage new companies to get into this business and help reducing prices for retail customers such as software exporters, call centres, banks, small and medium enterprises, internet service providers and other IT-enabled services.

According to the recommendations on terms and conditions applicable for resellers of bandwidth, TRAI said the applicant company for reseller license should have a net worth as well as paid up capital of Rs 2.5 crore.

The regulator also suggested a license fee at six per cent of adjusted gross revenues, same as that of International Long Distance license.

Further, conditions for Remote Access should be the same as applicable for ILD license and the FDI limit should also be consistent with that of ILD sector at 74 per cent.

TRAI said it favours a open competition in the resale in the IPLC segment without any fixed number of resellers and said it hopes DoT would accept its recommendations soon.

TRAI said the introduction of resale in the International Private Leased Circuits (IPLC) segment would promote competition and provide an effective entry for new entrants. This might lead to a cut in prices of international leased circuits, it said.

It would also lead to improved customer services to end consumers and business entities and expand the availablity of innovative services such as new billing terms and innovative tariff packages.