Raja: Making a point

New Delhi, Nov. 3: Telecom minister A. Raja today discussed issues relating to 3G auction, tariff plans and rural teledensity at a closed-door meeting with the heads of mobile firms.

The ongoing CBI investigation of telecom firms and the alleged scam in the allocation of second-generation (2G) spectrum and licences to new players also formed part of the discussion, sources said.

Officials of the department of telecom (DoT) said the telecom minister had asked firms to simplify their tariff plans. He foresaw a situation when local calls could drop to 10 paise per minute and long-distance calls to 25 paise per minute, they said.

Raja also asked operators to increase services in the country’s hinterland and proposed a subsidy for rural rollout.

The government has over Rs 16,000 crore in the universal service obligation (USO) fund and this can be used in subsidising rural telecom infrastructure.

According to data released by the telecom regulator, rural mobile teledensity reached 15 per cent by June-end this year. Urban teledensity also grew to 87.18 per cent.

Earlier, Raja had said the USO fund rules would be made more flexible to boost rural telephony. He has assured operators and potential bidders of a transparent 3G spectrum auction.

Finance minister Pranab Mukherjee today said the 3G auction would be completed by the end of this fiscal and the defence department would vacate spectrum according to the pact between the DoT and the defence ministry.

Telecom operators, including representatives of foreign firms, asked the minister for a time frame and method of additional spectrum allocation. They wanted details of the rollout norms for 2G and 3G services, call termination charges for 3G services and the norms governing merger or acquisition of an existing player by a winning bidder.

According to DoT officials, while a few clarifications were given during the meeting, a detailed reply would be sent to the individual firms.

The government plans to earn around Rs 35,000 crore from the sale of 3G spectrum to plug its fiscal deficit.

BSNL pact

State-run Bharat Sanchar Nigam today entered into a telecom tower and bandwidth-sharing agreement with Sistema Shyam Teleservices.

Sistema Shyam — a joint venture between Russia’s Sistema and India’s Shyam group — operates through 8,000 base stations. It will now have access to around 45,000 BSNL towers across all its circles.

This is the fourth such deal for BSNL in the past three months. Recently, BSNL had entered into similar contracts with Datacom, Aircel and Tata Teleservices.

The PSU had earlier said that it expected to garner revenues of Rs 1,000-crore annually from tower-sharing arrangements.

Meanwhile, Reliance Communications today introduced the per-second billing option for its subscribers across the CDMA and GSM platforms.

The call charge will be 1 paise per second.

This is the fourth such deal for BSNL in the past three months. Recently, BSNL had entered into similar contracts with Datacom, Aircel and Tata Teleservices.

The PSU had earlier said that it expected to garner revenues of Rs 1,000-crore annually from tower-sharing arrangements.

Industry experts said BSNL’s aggressive entry in the infrastructure space could set alarm bells ringing for private players since the PSU’s network reach within the country — especially the rural and remote areas — is vast.

Indus Towers — a joint venture among Bharti Airtel, Vodafone Essar and Idea Cellular — is the largest tower firm in the country with at least 100,000 towers.

"BSNL has a strong nationwide coverage and offers the best value proposition in the Indian telecom market. Our objective is to provide quality and reliable service and thereby increase our partner's confidence," said Kuldep Goyal, chairman and managing director of BSNL.

BSNL recently shelved its plans to hive off its towers and other related infrastructure into a separate company as it felt it will be difficult to unlock value by merely hiving off its infrastructure and listing it due to falling valuations for the tower sector.

Indian telecom providers have been increasingly outsourcing their IT infrastructure, as it would enable them to be asset-light and concentrate on their core competencies. The trend was started by Bharti-Airtel's deal with IBM, which has now risen to over $2 billion.

3G services allow users to surf the Internet or download content, including music and video, at a faster speed.