BSNL, MTNL oppose network unbundling

Telecom PSUs Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd have reiterated their opposition to unbundling their last mile network to private operators for broadband services.

At the first meeting of a PMO-appointed panel on opening up PSU networks for increasing broadband penetration, BSNL officials said their copper lines were very old and it was a myth that through unbundling, broadband avenues would open for all its 42-million fixed-line connections.

They added that only seven million lines were capable of being used for broadband.

Sources said the department of telecom (DoT) made it clear that there would be no compensation or subsidy to BSNL and MTNL even if they decided to open up last mile connectivity.

Telecom Minister Dayanidhi Maran had earlier expressed his views against unbundling when the Telecom Regulatory Authority of India had recommended opening up the local loop for broadband two years ago.

Since this was the first meeting of the PMO group, no final conclusion could be drawn. But going by the general sentiment, BSNL's opposition to unbundling is likely.

Since the DoT was against compensating the PSUs even if they agreed to open up, the onus of finding a mechanism to facilitate unbundling would be on the PMO.

MTNL officials also said since PSUs had spent a lot of money and time in creating the infrastructure, there was no justification for it to be given at a cheap rate to private players.

BSNL feared that unbundling may lead to private operators luring its fixed-line customers with the ruse of broadband coverage. Officials cited the example of the ISP licence given for Re 1 to boost Internet connectivity, but private ISPs ending up giving a more lucrative, virtual private network service through it.

Private telecom players, who were represented by associations like COAI and Auspi, suggested that only licensed telecom players should be allowed to access unbundling and cable operators should not be allowed to use the infrastructure.

Operators suggested that the incremental cost and depreciation value should be taken into account while deciding on the cost of unbundling or that working out costs could be referred to Trai. The US and the UK had already unbundled their local loop for broadband penetration.

The meeting which was chaired by DoT Secretary J S Sarma has asked for written statements of the operators. The PMO wants the report by May 30.

Perturbed by broadband expansion which was much below the target, at 1.5 million, against 30 million by 2005, the PMO is looking for ways to increase the figure and unbundle the local loop which means opening up of the PSUs' vast fixed-phone infrastructure to private players.