TDSAT asks VSNL to stop selling int'l calling cards

In a setback to Tatas-owned VSNL, telecom tribunal TDSAT has rejected its petition against the telecom regulatory authority of India (Trai) and department of telecommunication (DoT) and held that long distance calling cards sold by the company were illegal.

"We have come to the conclusion that the appellant (VSNL) is not authorised to provide the service of calling cards for making out-bound long distance calls under the conditions and clauses provided by national long distance (NLD) or international long distance licence (ILDL)," Justice N Santosh Hegde, chairman of TDSAT, said.

"This service can only be provided under the license of basic service operator or unified access service license," Justice Hegde said.

"By introducing this service, the appellant (VSNL) is directly accessing these subscribers, which is not allowed as per the licence condition," the tribunal further said.

On March 21, 2005 Trai asked VSNL to stop long distance calling cards citing VSNL's getting direct access to consumers, which was against the license condition. It was also not proving any data regarding caller identification and was thereby denying national security agencies from intercepting calls.

Later, VSNL challenged Trai's notification before TDSAT, which also summoned DoT during the proceedings and made it a party in the case on the grounds that Trai acted on its directions.

Using VSNL long distance calling cards, any user could make an ISD call using a toll-free number.

Responding to the petition, Trai said as per licence conditions, only Tata Tele Services (TTSL) and Tata Tele Services Maharashtra (TTSML) customers were entitled for the service.

VSNL defended itself by saying that it was only providing choices to the subscribers for international calls and was in accordance with the provisions. It was selected as one of the four operators by DoT to provide international and long distance calls.

Trai further alleged that the main aim behind VSNL's calling cards plan was to save on revenue and carriage charges. VSNL, which got tax holidays for two years, was able to evade the whole money earned by these calling cards.

If it had provided this service through its TTSL and TTSML, it would have had to pay a licence fee for it.

The tribunal agreed with Trai and rejected VSNL's appeal.

"We also find that the revenue generated by the appellant and also the access deficit charge are retained by it because it is on a tax holiday for two years.

"The licensee is under obligation to pay a part of the revenue generated as licence fee. Had the licensee introduced this service through the access providers of the same group of companies (Tata Teleservices), the revenue generated as also the other charges ike ADC would have been paid," TDSAT said.