Paswan Wants To End Vsnl Monopoly Before 2004

The decks have been cleared for an end to Videsh Sanchar Nigam Ltd's monopoly over international voice telephony before 2004 with communications minister Ram Vilas Paswan endorsing the move for the first time. Speaking to Business Standard, Paswan said, "Given technological changes like voice over Internet as well as pressure to reduce our international accounting rates, we cannot wait till 2004. We have to do it much earlier." The department of telecom services had earlier opposed the move, saying it would be against the interest of investors in the company's ADR issue, whom the government had promised retention of VSNL's monopoly till 2004. However, the core group of secretaries on disinvestment had recommended an end to VSNL's monopoly over international long distance telephone service by 2002 against the earlier deadline of 2004. The minister said that the department of telecommunications has also proposed not to open intra-circle traffic to domestic long-distance players as it would adversely affect the revenues of the cellular and basic operators. On the government proposal to divest equity in VSNL and MTNL, Paswan opposed the move, saying, "We cannot talk about divestment while the department is being corporatised." Paswan said he is putting up a proposal to the PMO to allow the department of telecommunications to retain the money earned from revenue sharing with private operators so as to meet the target of rural telephony by 2002. "I am going to place a request with the PMO to allow the department of telecommunications to retain the money earned from revenue sharing with the department itself to meet the target of rural telephony by 2002," Paswan said. Admitting that the end of VSNL's monopoly would lead to a drastic fall in revenue, Paswan said, "Yes, the end of monopoly would effect revenue, but keeping in view the low outgoing international traffic which today is at 14 per cent, as against the 86 per cent incoming, fall in charges will increase the volume to compensate the loss." Paswan said there was a lack of funds with the department to meet its obligation to provide telephones in all villages by 2002. He said the proposed Universal Service Obligation Fund will not be sufficient to meet these targets and he would ask the PMO to allow the department to retain the revenue earned from lContinued on Page 10 the revenue sharing. He said the department is going full steam ahead for setting up telephones in villages. "Recently, I ordered more than six lakh WLL phones and have also asked for replacement over two lakh MARR phones. While using WLL phones to bring a village immediate connectivity, we are also laying cables simultaneously," Paswan said. On the problems of opening up intra-circles to domestic long distance players, Paswan said: "Though the final decision will be announced next week, the logic behind opening the intra circle traffic is to avoid the losses of the basic and cellular operators in a circle," Paswan said. "The total income of Rs 4,000 crore within the circle and Rs 6,000 crore from outside the circle of the cellular operators will be affected if the government decides to open up the intra circle to DLD operators. We have to see from that perspective as well," the minister said.