Telecom Panel To Discuss Bt, Vsnl Venture Tomorrow

The Telecom Commission is scheduled to meet tomorrow to discuss the proposed British Telecom-Videsh Sanchar Nigam Ltd project to set up a regional transmission hub in the country. Sources said a final decision on the Rs 1,600 crore proposal was unlikely at this meeting.

The nine-member commission the apex body of the department of telecommunications (DoT) has met four times in the past to discuss the BT-VSNL project.

Each time, it has deferred a decision. The project is estimated to have a turnover of Rs 5,000 crore over 10 years.

The DoT stance on the project has been vacillating. During the roadshows of the VSNL global depository receipts issue in March, communications minister Beni Prasad Verma had said the government would clear the BT-VSNL project. Telecom secretary A V Gokak and other senior DoT officials have maintained that the department needs more time to take a final view.

 

However, the DoT brass has unofficially acknowledged that the project, if cleared, could create problems for the government. They say the huge capacity proposed by the venture would be tantamount to a backdoor entry of other players into domestic long-distance service, which is a monopoly of the department.

The BT-VSNL proposal envisages setting up of a submarine high-capacity fibre optic cable from Karachi to Calcutta to carry traffic from India, Sri Lanka, Bangladesh, Myanmar and, perhaps, Mauritius and Pakistan.

The cable and associated land equipment will form a regional hub for handling voice and data traffic from South Asia.

The submarine cable is to be interconnected with VSNL gateways (exchanges and associated equipment through which international traffic is routed) in Mumbai, Ernakulam, Calcutta and four other coastal cities.

A Jalandhar to Lahore cable is also proposed in the venture. Spurs or offshoots from the cable are to connect Mauritius, Sri Lanka, Bangladesh and Myanmar.

DoTs argument against the project has been that clearance of the BT-VSNL project would allow a future competitor to set up a high capacity network around the country.

They (the BT-VSNL project) would be in an ideal position to capture a sizeable portion of the national long-distance or international traffic market once it is opened up to competition, a source said.

The Union government has committed to the World Trade Organisation that it will review DoTs monopoly over national long distance services in 1999.

It has also promised to re-examine VSNLs exclusive rights to handle international traffic of the country by 2004.

The Rs 1,600 crore project is to be entirely financed through equity. BT and VSNL will hold 40 per cent each in the venture, with the remaining 20 per cent will be shared equally between a Japanese and Indian investor.

The names of Marubeni and NTT of Japan, Infrastructure Leasing & Financial Services and the Mahindra group have been reported as possible partners in the consortium.