Business Today Net Special

BSNL: Big Bully?

It controls 99 per cent of India’s 30 million fixed phone lines, and now Bharat Sanchar Nigam Ltd. Wants to squeeze its smaller competitors out of business by insisting on higher interconnect charges. And even as the new private players watch helplessly, the Telecom Authority of India is turning a blind eye to BSNL’s bully.

By Ashutosh Sinha

D.P.S. Seth, Chairman, BSNL

Telecom companies are complaining that TRAI, the Telecom Regulatory Authority of India, has now become a four-letter word for them. That the regulator actually has a four-word acronym is, however, a mere coincidence.

The complaint is doing the rounds at a time when for the first time in Indian telecom history, competition is becoming a reality---BSNL is preparing to battle relatively more established players in the cellular market while the basic telecom companies will fight it out with BSNL. The countrywide launch of BSNL's cellular service is round the corner, with MTNL having taken the lead. Basic telephone companies, Reliance in particular, are gearing up to take on the might of BSNL’s 30 million fixed line network. Tata Teleservices from Andhra Pradesh and Hughes Ispat of Maharashtra have agreed to merge.

It is certainly not the best of time for telecom companies, which are fighting the competition from BSNL and braving the uncertainty. But the scales appear to be tilted heavily in favour of BSNL in this battle. BSNL is the only national level player among all competitors who exist in various telecom circles. Given that it commands 99 per cent of the 30 million fixed phone network in the country, interconnect should have been seamless from day one. But when BSNL subscribers call Shyam’s customers in Rajasthan or HFCL’s in Punjab, the calls are just not connecting. To drive the final nail in their coffin, BSNL has now written to the private basic telecom players that local, intra-circle, and inter-circle call charges have to be renegotiated. And I am still waiting to hear from TRAI as to what it is doing about BSNL’s abuse of market power? The loser in the end? The consumer, of course.

BSNL refuses to share its revenues in long distance calls to their network, emanating from cellular companies, making long-distance calling on the cellular network very expensive. Inter-circle calls on the cellular network, which will make calling across the country very cheap is not permitted. Who, then, is the loser? The poor consumer, again.

The three priorities for a regulator should always be to interconnect, interconnect and interconnect. But interconnect prices are still determined by BSNL. As per the telecom policy, telecom services cannot be priced below the rates charged by BSNL. With access and tariff being determined by BSNL, and not TRAI, things can only get worse for the minnows.

Is it, therefore, a surprise that the most profitable business in the country---domestic long distance telephony, an estimated Rs 15,000-crore opportunity---has no takers from the global companies? Again, in the absence of competition the consumer will end up the loser. With bidders for VSNL dropping by the day, things don’t look rosy for long distance telephony either.

I may be presumptuous in thinking it is time for TRAI to crack the whip, so I asked a few experts if my ideas were bordering on the insane. One, Mahesh Uppal, was willing to be quoted. "The only way competition can nucleate and thrive is by regulatory action against the incumbent," he says.

Perhaps, the only reason that can perhaps justify the inaction from TRAI Chairman M.S. Verma, and his team, is that he gets his salary from the Department of Telecom. The tap can be turned off, if he turns on the screws.

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