The Telegraph
Since 1st March, 1999
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Videsh Sanchar, BSNL seal deal on connectivity

Vadodara, Nov. 18: Videsh Sanchar Nigam Ltd (VSNL) and Bharat Sanchar Nigam (BSNL) Ltd seem to have reached an agreement on the controversial interconnect issue and a formal announcement is expected this week. VSNL has agreed to match the revenue share offered by private carriers like Bharti and Data Access.

Rounds of talks held between senior officials of both companies in the last one month seem to have finally paid off. “The negotiations have resulted in an amicable solution and we will sign the interconnect agreement in a day or two,” sources in Tata and BSNL said.

An interconnect agreement is important between these two operators, since calls made from India through BSNL’s network have to be carried ahead by an international carrier who in turn hands over the call to another international carrier, that is then taken to a network operator like BSNL to the person you have called.

At a meeting held between communications ministry officials and VSNL executives, the latter offered to carry BSNL’s international traffic at much lower rates than those offered by other private operators, provided it gets entire traffic from the two telecom public sector companies—BSNL and Mahanagar Telephone Nigam Ltd.

“We have not demanded anything more than what was promised to VSNL as part of its compensation package during its sale. We held a number of meetings with BSNL officials and they had agreed to look into it. An agreement has been reached, but we cannot say anything unless it is signed,” a senior Tata executive said.

Officials in BSNL were tight-lipped about the final deal. Communications ministry sources confirmed that the companies have reached an agreement and a formal announcement will be made once the two boards approve of it.

The BSNL officials also met communication minister Pramod Mahajan and briefed him about the deal. Tata chief Ratan Tata along with top company executives met Mahajan last month, a meeting which helped thaw the stiffness with which the two organisations were discussing the contentious issue.

BSNL has an interconnect agreement with IndiaOne to carry the calls emanating from BSNL’s network at a cost of Rs 3.30 per minute. It has started to divert about 5-10 per cent of the traffic from VSNL’s network to other networks since the company failed to sign the interconnect agreement.

“Technically, it is not possible to divert all the traffic from one network to another in a day. It takes at least one month to do so. BSNL can now divert the entire traffic since it has already begun to do so, and if VSNL fails to sign the agreement, it can take away all the traffic from the latter,” a senior IndiaOne executive said.

As the two companies reached a deal on revenue share, there are indications that Trai will ask the government to make it mandatory for service providers to give cost break-up of the network to determine wholesale and retail pricing of the services.

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