After lowering the entry barriers for new operators in the long distance sector, the next big push that the Department of Telecommunications (DoT) is aiming for is implementation of the carrier access code (CAC).
The draft New Telecom Policy (NTP), 2005 too recommends immediate implementation of the CAC in order to step up competition and give users a choice of carrier. DoT’s haste in pushing the CAC through is motivated by the desire to see more players come into the long distance sector, leading to lower tariffs for the end-user.
Currently, there are four players in the national long distance (NLD) and international long distance (ILD) sectors ?? BSNL, VSNL, Bharti and Reliance Infocomm. But users do not have the option of selecting their operator based on the most competitive call rates. According to DoT officials, once the CAC is introduced, operators would be allowed to charge lower rates for carrying calls. Today, a one-minute carriage charge is fixed at between Re 0.20 and Rs 1.10 for different distance slabs. And even though leased line rates have fallen by over 70 per cent in the past few months, the benefits have not been passed on to the end-user.
The advantages of call-by-call and carrier pre-selection (CPS) are not unknown to the telecom industry. In fact, it has been discussed for the last three years since the Telecom Regulatory Authority of India (TRAI) had issued a directive to implement the CAC when the interconnect usage charge (IUC) regime was being put in place. Implementation was, however, deferred at the time as BSNL did not have the required call data record (CDR)-based billing system. DoT relaxed the implementation of CAC services on the PSU network for a period of 12 months, with a caveat that the relaxation would be withdrawn in case the Bureau Model Interconnect Settlement or upgraded CDR billing system was put in place.
In order to assess the readiness of the operators to introduce the CAC, last month TRAI issued a letter to all service providers to clarify the status regarding their ability to implement CAC on their respective networks.
However, it appears that none of them is ready to implement CAC immediately, despite having been given ample time to do so. BSNL, the main long distance operator, still does not have the required switches that allow carrier selection. Moreover, as telecom analyst Mahesh Uppal points out, “Resistance has typically always come from the incumbents who see increased competition as a threat to their market share. This has been the international experience as well.
The operators have asked the regulator for time. According to TRAI, BSNL has stated that it is in the final stage of putting its CDR billing system in place. TRAI notes that the CAC cannot be implemented under level playing field conditions unless BSNL is ready.
To successfully implement the CAC, all the operators need to set up CDrbased billing systems. This has cost implications. Technological changes are required to be made by the service providers to upgrade their networks in order to offer dynamic carrier selection. Further, agreements have to be executed between the access providers and the NLDOs/ILDOs so as to enable one service provider to directly access the customers of another.
Analysts do not see a big problem here. They feel that it should have been possible to implement the CAC as most of the mobile switching centres (MSCs) have adequate capacity to store the extra four digits (the CAC) dialled by the subscribers.
Analysts also suggest following international practice since many countries already have state-of-the-art CPS systems in place. Systems manufacturers in these countries would be able to supply readymade software modules to Indian operators, thus saving the Indian telecom industry the cost and time required to develop a new software module for CPS functionality from scratch.
Costs thus remain the biggest deterrent, though analysts feel that, overall, these costs would be a very small fraction of the total revenues. TRAI and the operators have several options in dealing with these costs. Some part of it is likely to be passed on to the subscribers in the form of fees to avail of the service. The rest could be shared by the connecting operators.
DoT has appointed a committee consisting of officials from DoT and the Telecom Engineering Consultants, to determine the implications of the required upgradation.
There is also some concern regarding transparency in billing. The operators feel that billing would be a challenge when multiple operators come into play in completing a call. They feel that TRAI needs to put in place stringent systems to prevent billing abuse.
Given these concerns, it appears that it will still be a while before telecom users are able to choose their long distance carrier.
