VSNL calls for end of BSNL monopoly

In its desperate attempt to gain the market share in the newly launched NLD service and to regain its lost ILD market share, VSNL has asked TRAI to stop BSNL’s monopolistic way of operation and create a level playing field. The company has also asked TRAI to look into the revenue sharing arrangement between the ISP and the operators.

The situation has worsened to such an extent that SK Gupta, CMD, VSNL has requested TRAI to intervene and chart out a justified tariff structure for all the long distance service providers. Sounding extremely bitter against the state-owned telecom BSNL and MTNL's monopolistic regime, Gupta explained that the root cause of the problem was the tariff sharing structure as envisaged under the IUC regime. Citing a typical case of a 500+ Km long distance call-originating and terminating at BSNL, with VSNL being the carrier - as an example to drive home his point, Gupta informed that under the new regime, while BSNL would be getting Rs 2.50 as originating charge and Rs 2.50 for termination charge, VSNL as the carrier would be taking home Rs 1.10. "This," explained Gupta "was because the total charge for the entire call has been fixed at Rs 6.10 by
TRAI." 

On the other hand BSNL provides the same NLD services at Rs 4.80 when it acts as the originator, terminator and the carrier itself. Obviously this helps BSNL woo customers, leaving VSNL high and dry. According to Gupta, unless this anomaly is set right, it would not be possible for any NLD carrier, except BSNL to survive in the market. The onus to do so, Gupta stressed, rests solely with TRAI. "Only it can prevent BSNL from going ahead with its Rs 4.80 plan," he said.

BSNL has stifled out VSNL's revenue routes on the ILD front too. TRAI guidelines stipulate that the ILD tariff needs to be filed only by the ILD operator, a condition that Gupta feels can work only when there is a customer access code available.

Otherwise, the customer has no option of choosing an ILD carrier and currently, BSNL and MTNL together garner more than 95 percent of the market. 

Gupta believes that there can be genuine competition only once this share drops below 50 percent. A typical ISD call to the US, now costs Rs 24, of which Rs 9 is taken away by BSNL for terminating the calls, while the international carrier takes another Rs 7. This leaves VSNL with only Rs 8 and Gupta felt that with this margin it is not possible for VSNL to bring down the ILD costs any further.

Thirdly, on the retail ISP front too, VSNL seems to be getting the short change from the state service providers like BSNL and MTNL. For an hour of dial-up Internet surfing, VSNL currently accrues only Rs 6 as ISP charges, while BSNL or MTNL garner Rs 25 for the same. Unless this revenue is shared in a Rs 15-Rs 10 ratio between BSNL and VSNL respectively, the very survival of VSNL as a retail level dial-up ISP is at stake.

For all these three issues, VSNL has put forward strong recommendations to both TRAI as well as the government and Gupta is keeping his fingers crossed for a favorable verdict. Though his grouses on the NLD, ILD and even the ISP front stand to reason, it’s pretty ironic to think that just an year back most of the telecom service providers in the country were hurtling the same allegations at
VSNL.

Rahul Gupta

(CNS)