Last-mile split inevitable: Trai

'Tax sops will make broadband services cheaper'

Telecom Regulatory Authority of India (Trai) Chairman Pradip Baijal today said operators would one day realise the importance of unbundling their last-mile connectivity.

"The government had to drop unbundling of the local loop clause from the new broadband policy as Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd opposed it. But one day they will recognise the value of this gold mine and start unbundling," Baijal told reporters on the sidelines of a seminar organised by the Federation of Indian Chambers of Commerce and Industry (Ficci).

Baijal's statement came a day after the government ignored Trai's recommendations on unbundling, fiscal measures and the open sky policy in the broadband policy announced yesterday.

The Trai chief said a number of areas like the open sky policy for the VSAT and DTH operators and the finance ministry's approval for the suggested fiscal incentives were still awaited.

He said the tax breaks and the open sky policy, which allows DTH and VSAT operators to work directly with any international satellite, would help reduce the price of broadband services.

"The services will not kick off if prices remain at the present level of $15 for a 100 kilobytes per second connection. In Korea, they charge $0.25 for this, whereas their per capita income is 20 times that of ours," he added.

Earlier, addressing the seminar, Baijal said the government was determined to replicate the success of mobile telephony in broadband services. He said more and more corporates entering the business could improve the service and the content side of broadband.

"This chicken and egg story of services and content can only be broken by a set of initiatives, rather than only one initiative. There is enormous amount of fibre, which needs to be utilised properly through appropriate policy and a sound regulatory mechanism," Baijal said.