The Telegraph
Since 1st March, 1999
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Reliance pricks telecom purses
- BSNL, MTNL face staggering upgrade bills to keep pace with Ambanis

New Delhi, Dec. 30: The state-owned Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) will have to make additional investments to upgrade their network to receive and send text messages from IndiaMobile, the limited mobility service launched on Saturday by Reliance Infocomm, or face the risk of losing customers to the new operator.

Both the BSNL and MTNL boards are scheduled to meet next week to decide on the future course of action. IndiaMobile has already signed the interconnect agreement with the two public sector telecom companies.

“An action will have to be taken. We will approach the communications ministry after the board takes a decision. Otherwise, we will certainly lose customers,” said a senior BSNL official.

However, this will allow only voice communication between the IndiaMobile subscriber and the two PSUs and not any other value-added service offered by IndiaMobile.

“We are yet to make an assessment of the investment that will be required to provide the value-added services similar to that offered by private operators offering limited mobile service. Even by a simple back-of-the-book calculation, the investment will not be less than Rs 15 crore,” sources in BSNL said.

According to senior officials in Telecom Engineering Centre (TEC), the existing limited mobile network of both BSNL and MTNL does not support any kind of text messaging software.

Moreover, the existing handsets used by the subscribers of the two companies will not support any value-added services that they may hope to get from their friends and families using the IndiaMobile network or Tata's Indicom.

“It is a do-or-die situation for the two government companies. IndiaMobile has already made it clear in its application that the STD calls will be available at 40 paise per minute only on its own network all over the country. This would result in exodus of subscribers from BSNL and MTNL if they do not match the prices,” said sources in the communications ministry.

“The government is the majority stakeholder in both the companies and will have to take the necessary actions,” sources added.

Another problem that an IndiaMobile subscriber may face is the quality of value-added services even if the cellular operators agree to sign the interconnect agreement with limited mobile service providers. The two technologies — Global System for Mobile communications (GSM) used by cellular mobile operators and Code Division Multiple Access (CDMA) used by limited mobile operators — are incompatible.

“Voice is not a major problem but data and other services have not been fully tested in India. In the US, the problem that surfaced has been addressed by using additional software to make it compatible,” sources in TEC said.

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