Firms Seek More Time To Sign Pacts With Dot

We have to send the revised draft (interconnect agreement) to our foreign partners and get their reaction to it. There is no way we can keep to the September 12 deadline, Zahid Baig, director, Tata Telecom told Business Standard yesterday. Baig confirmed Tata Telecommunications, the basic services licensee for Andhra Pradesh, would be requesting the department of telecommunications for an extension today.

Other companies echoed this view. Nobody will be able to sign the agreement within the deadline. We will have to ask for an extension, one telecom source said. Hughes Ispat, the provisional LoI holder for Maharashtra, functionaries are meeting today to decide on the future course of action. Pramod Saxena of Essar Commvision, the LoI holder for Punjab, also said his company would take a decision today on signing the interconnect and licence agreements.

 

The basic operators, meanwhile, have received the revisions made by DoT in the interconnect agreement with little enthusiasm. Most companies which have been issued letters of intent feel that the reduction in interconnect charges are welcome, but feel they are still very high. It is like jumping a pole vault without the pole, one telecom official said.

The reductions are all very well from DoT's point of view, but the effective charges still remain way too high, another telecom official said. What was earlier Rs 1,500 crore has now come down to some Rs 1,000 crore, which is still too high. Our financing plans go through the window, he said. Yet another LoI holder predicted litigation because the interconnect charges were not there in the tender document.

Operators feel besides the high port charges, there were other issues which were at stake. The connectivity to cellular providers and other value-added service operators that we had asked for has not been touched upon.

DoT is going against the spirit of fair competition by not providing connectivity between value-added service and basic telecom operators, one telecom company official bemoaned. Lack of clarification on provision of multimedia services is another point that telecom company officials are peeved at.

Also, the basic operators are unhappy that other outstanding issues like assignability of the licence have not been resolved. In our discussions with DoT, we were given the impression that assignability was being considered. But, there is no mention of this in the revised licence agreement given to us on Saturday, Saxena of Essar Commvision said.

Basic operators are also unhappy that certain force majeure clauses which spelt that licence fee will have to be paid even when the clauses were enforced have not been amended.

Typically, force majeure clauses are included in licence agreements to take into account unforeseeable course of events excusing a company from fulfillment of a contract.

The demand of the operators that the tender document should not give DoT the right to change the clauses of operation any time it wants to has also not been acceded to.

The clause that the licensor will hold the right to modify the terms of the agreements will ensure that not a single banker will touch the projects, a telecom official said.