Ater a great deal of deliberation, the elecom Regulatory Authority of India (TRAI) has submitted its final recommendations on the resale of international private leased circuits (IPLCs) to the Department of Telecommunications (DoT). The regulator has defined “resale” as being “the sale or lease of telecom services to an end-consumer on a retail basis after leasing from a telecom service provider on a commercial basis at wholesale prices. In case of resale of IPLC, resellers are required to take IPLC from licensed international long distance operators (ILDOs) and sell to end-consumers”.
The guidelines are expected to promote competition, improve customer services to end-customers and business entities, stimulate usage of the existing network through innovative means, expand the scope of innovative services such as new billing terms and innovative tariff packages, and provide an effective entry vehicle for new entrants. By permitting resellers to enter this space, the sector is thus being opened up to more competition.
Currently, only ILDOs ?? Bharti Airtel, Reliance Communications and Bharat Sanchar Nigam Limited (BSNL) ?? are permitted to sell IPLCs. The regulator has sought open competition in resale in the IPLC segment without any ceiling on the number of players entering the sector.This will encourage new companies to get into this business and help reduce prices for retail customers such as software exporters, call centres, banks, SMEs, internet service providers and other ITenabled services.
The key highlights of the TRAI recommendations are as follows…
Scope of licence for resale in IPLC segment
The reseller would provide end-to-end IPLC of any capacity between India and the country of destination. Resellers are required to take IPLC (wholesale bandwidth) from ILD players to provide IPLC to end-consumers on a retail basis. The reseller’s licence should be applicable to the whole country and not just to a single service area.
Eligibility criteria
The applicant company for the reseller licence should have a net worth and paid-up capital of Rs 25 million each. The overall licensing and regulatory framework should be in line with that of ILD operators.
Foreign equity limit
The terms and conditions for foreign equity should be consistent with those of the ILD sector, as applicable from time to time, which is currently 74 per cent.
Entry fee
The entry fee should be Rs 10 million.This amount is non-refundable, in order to maintain a balance between encouraging new players to enter the market and ensuring only the serious players enter and remain.
Licence fee
The licence fee should be in line with the ILD licence, which currently stands at 6 per cent of the adjusted gross revenue (AGR).
Financial bank guarantee
Resellers need to submit a financial bank guarantee (FBG) of Rs 10 million within one year of the effective date of the licence agreement or before the commencement of the service, whichever is earlier. The FBG would be valid for a period of one year and would be renewed from time to time for such an amount as may be direcTed by the licensor.
Security conditions
Resellers have to extend full support to security agencies and follow the guidelines issued from time to time by the security agencies, licensor or TRAI. Both the ILD operator and reseller would be responsible for any breach of security condition or instructions issued by security agencies or the licensor in accordance with their functional responsibility.
Remote access
The conditions for remote access should be the same as those applicable for ILD licences.
Tariffs
The tariff charged by resellers should be as per the regulations, tariff orders or directions issued by TRAI in this regard from time to time.
Preparation of accounts
Resellers should draw, keep and furnish an independent account for the service and should comply fully with the orders, directions and regulations issued by TRAI.
Duration of the licence
The duration of the resellers’ licence would be 10 years, extendable by five years, subject to satisfactory performance in accordance with the terms and conditions of the licence.
Customer service
The licensee (the reseller) should be open to inspection and maintain a transparent waiting list. In addition, the reseller should clearly indicate the service specifications to the subscriber at the time of entering into a contract with the customer.
Quality of service (QoS)
The reseller has to ensure compliance with the QoS guidelines set down by TRAI.
TRAI has also recommended that resellers should ensure that there is a logical separation between the IPLC and any other telecom-related activity provided by the same company.
