NLDOs cannot handle intra-circle traffic: DoT

In a major setback to long distance service providers, the department of telecommunications (DoT) has stated that the national long-distance operators (NLDOs) cannot provide intra-circle traffic in the country.

The licensor was of the opinion that intra-circle traffic (routing traffic within the circle) was against the licence conditions and the NLDOs are only permitted to provide inter-circle long-distance traffic (traffic from one circle to another).

The department was also of the opinion that an access provider can use the services of an NLDO for only carrying traffic from its own network in one circle to its own network in another.

However, for the calls destined for other networks, it has to be handed over to that operator directly and not through an NLDO.

The DoT was replying to a Reliance Communications' query, wherein the company had sought to clarify certain provisions of the NLDO license.

Industry analysts were of the opinion that Reliance Communications and Bharti Airtel would be "significantly affected" by this move as these companies have strong intra-circle operations. According to Telecom Regulatory Authority of India (Trai) statistics, 87 per cent of the companies' calls during the financial year ended March 31, 2007, came in from these operations.

This could also affect Idea Cellular to an extent, as the company also has NLD operations in the country. However, the move is unlikely to impact Spice Telecom, which has recently received NLD licences but is yet to commence operations.

Tata Teleservices Ltd (TTSL) and state-owned Bharat Sanchar Nigam Ltd (BSNL) are other companies that have NLD licenses in the country.

The NLD market in the country is growing at around 35-40 per cent, with the NLD data market alone estimated to be over $1.5 billion.