Trai questions Flag on restrictive practices

The Telecom Regulatory Authority of India (Trai) has questioned Flag Telecom, a Reliance group entity, for its higher pricing, commercial terms and conditions, that were restricting the growth of Indian information technology-enabled service (ITES) companies.

The regulator, however, directed Flag to offer capacity to Indian IT companies at terms that are mutually acceptable to the buyer and seller, and not to hamper the growth of business process outsourcing and technology companies.

Trai at a meeting last month-end had asked Flag to facilitate IT and ITES industries by providing bandwidth on reasonable terms, Trai sources said here today.

Earlier, Reliance Infocomm's officials had informed Trai that flag was unable to sell capacity on its submarine cable in India as ITES companies were not in a position to buy bandwidth on its terms and conditions, they said.

Three officials led by Reliance group director Bhagwan Khurana had represented Flag during the meeting and informed Trai that Indian IT and BPO companies "are interested in buying capacity in small denominations and that also on a short-term basis, which Flag was not keen to offer".

They also said "no Indian IT company came forward to buy capacity from Flag Telecom on an indeferrable right of use basis, except for Reliance Infocomm and Reliance Communication Infrastructure Ltd ".

However, a Reliance Infocomm spokesperson clarified and said that Flag had offered bandwidth to Indian ITES companies. "This was on better terms and conditions rather than that prevailing in the market".