The Telegraph
Since 1st March, 1999
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Telecom titans trudge to truce

New Delhi, Nov. 19: The warring telecom titans are now a cosy couple. Videsh Sanchar Nigam (VSNL) and Bharat Sanchar Nigam (BSNL) today inked a pact resolving the vexed interconnect issue, with a provision for a volume discount of 30 per cent for calls originating outside India.

The volume discount will be subject to the condition that paid calls per minute do not fall below 90 million or its equivalent in any given month. The agreement is valid for a period of one year till March 2003. VSNL has agreed to pay BSNL Rs 14 for calls from the Gulf, Rs 6 from the US, and Rs 9 from anywhere else in the world. For outgoing calls from India, the pay out will be Rs 7, but these figures could not be confirmed by either of the companies.

Today’s agreement signals an end to the month-long talks being held between officials of the two companies.

“We had to meet the deadline set by the communications ministry and also did not want this issue to cast a shadow on Tata Teleservices’ launch in new circles scheduled in the first week of next month. So we have signed the interconnect agreement and the details of the revenue share will be announced tomorrow,” VSNL sources said.

The interconnect agreement between these two operators is important, since calls made from India through BSNL’s network have to be carried ahead by an international carrier which, in turn, hands them over to another international carrier from where it is taken to a network operator like BSNL in another country to the person called.

“In the interest of the company’s shareholders, employees and consumers, VSNL today signed new interconnection agreements with BSNL and MTNL. These agreements provide the basis for traffic settlement between the companies, underlined by the commitment of BSNL and MTNL to route all their outgoing traffic through VSNL,” a company statement said.

Commenting on the development, VSNL managing director S. K. Gupta said: “These agreements signed by VSNL today follows several months of negotiations with BSNL and MTNL. We can now look forward to securing our core international telephony business and aggressively implementing our ambitious growth plans in other telecom service areas, such as national long distance telephony and internet telephony.”

At a meeting held between communications ministry officials and VSNL executives held in Mumbai, the company offered to carry the international traffic of BSNL at a much lower rate than offered by other private operators, provided the whole traffic from the two PSUs was exclusively routed through VSNL.

The company had even sought legal opinion from its counsel, who suggested that it should divert the traffic from VSNL. However, the communications ministry had asked the PSU to go slow on the suggestion.

BSNL, headed by Prithipal Singh, already has an interconnect agreement with Bharti Telesonic to carry calls emanating from its network. Both state-owned firms had threatened VSNL that if it fails to sign the interconnect agreement, STD traffic will be routed through Data Access and Bharti Telesonic.

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