Bandwidth resale must not be limited to NLDOs, says Trai

The resale of international private leased circuit (IPLC) should not be restricted to national long-distance operators (NLDOs), as this will defeat the basic objective of introducing resellers, the Telecom Regulatory Authority of India (Trai) has said.

An IPLC is a point-to-point private line used by a company for Internet access, business data exchange and video conferencing with its offices across different geographies.

Trai has clarified that it has no issue with re-sale licences for NLDOs in the IPLC segment. However, in a letter to Minister of Communications & IT Dayanidhi Maran, Trai said that limiting the licences for NLDOs would defeat the basic objective of introducing resellers.

The regulator said the concept of resellers was envisaged to create "effective competition" in the IPLC segment.

Fundamentally, a reseller has the role of a non-facility-based entity, who sells bandwidth bought from the facility-based operators (FBO). The reseller gets an arbitrage on the difference between the bulk and retail rates. Hence, the concept of retailers would provide an entry strategy for new entrants, Trai said.

The regulator was of the opinion that NLDOs were also FBOs. The core activity of NLDOs is to provide long-distance services and develop infrastructure, it said.