Gearing up for the fourth round of bidding for the provision of basic telecom services in the circles, basic telecom operators have agreed that the duopoly structure of the industry should be restricted to 10 years, provided that the government extends their licence period from 15 to 25 years.
Currently, basic telecom companies in the country have an exclusive licence period for 15 years, creating a duopoly along with the department of telecommunications (DoT).
This industry structure has been criticised by regulation experts who feel that an open market _ or at least the introduction of one or two more players _ is necessary for consumers to benefit from telecom deregulation.
The proposal to reduce the exclusivity of the licence period forms part of a list of issues prepared by the Association of Basic Telecom Operators (ABTO) that the department of telecommunications (DoT) should tackle before announcing the fourth round of bids for basic telecom services (expected before the end of this year). The other issues the operators, under the Association of Basic Telecom Operators, have pointed out include a revenue-sharing agreement, the creation of a universal obligation fund, first preference to existing basic operators when domestic long distance telecom services are opened up, the need to be technology-neutral while choosing equipment, and rational telecom tariffs.
ABTO has made a strong pitch for a revenue-sharing agreement in place of the current licence fee sysytem. "The licence fee regime has to be scrapped. Better methods, which involve a balanced mix of a one-time fixed charge payable upfront and a revenue sharing model for later years, should be adopted," the note says.
The one-time fee can be decided by a competitive bidding process, it adds.
Commenting on the universal service obligation -- which mandates that operators roll out their services into rural areas -- the note moots the creation of a universal service fund " to help both DoT and private operators meet their social commitments".
Alternatively, a subsidy of Rs 20,000 per direct exchange line should be considered by the government to be given to the private operators, it suggests.
