Tata Teleservices Ltd is the third private operator in the country to offer basic telephone services. It started operations in Hyderabad in January 1999 and enrolled over 2,000 subscribers in the first two months of operations.

Next: Tata Teleservices will launch its services in Vijayawada and Visakhapatnam. The company operates about 100 public telephone booths in Hyderabad besides offering facilities like directory assistance and a 24-hour help desk. It plans to extend its services to include leased lines, ISDN, voice mail and data transmission services.

The basic infrastructure is based on a network of centralised digital switches with remote switching capability. The transmission is done through fibre optic cables and digital microwave systems. The company uses CDMA technology deployed in the 'wireless in local loop' (WLL) format to minimise delays due to cable laying. The technology is sourced from one of the Tata group's joint venture partner, Lucent Technologies of the US.

Tata Teleservices holds the licence to operate in the Andhra Pradesh circle. It won the licence in 1996 with a bid amount of Rs 4,200 crore, to be paid in 15 years. The company will invest about $2 billion in this operation over this 15-year period.

This company is a joint venture between the Tata group, Bell Canada International (BCI) and American International Group. The Tatas hold a 77 per cent stake in this company, BCI 13 per cent, and AIG 10 per cent. The basic services venture is the single largest investment the Tata group has made in the state of Andhra Pradesh.

Meanwhile, Bharti Enterprises is looking at Haryana for its next major telecom investment. The company has gone ahead with equipment procurement moves even before the bidding for this state was initiated by the government. The company is confident of being awarded the contract, and wants to be able to speed up on its move to start operations.

For Bharti, the priority is to get the licence for operating in Haryana, Delhi and Western Uttar Pradesh, with a view to becoming the major telecom player in northern India. It already operates cellular services in Delhi and Himachal Pradesh besides basic services in Madhya Pradesh.

Bharti Telenet in Madhya Pradesh was the first private service provider to start basic services in India, about a year ago. Hughes Ispat started operations in Navi Mumbai a few months later. The customer response has not matched their expectations or brought in the kind of revenues that will quickly offset the heavy license fees that these companies offered to win the contracts.

Besides the licence fee cost, these companies have invested large sums in the latest technology and equipment. Many of them have not paid the licence fees dues, even after the cut-off date of 31 March 1999.

The market situation might have been one of the reasons for the turnaround in the stand taken by the Association of Basic Telecom Operators with respect to multiple players in the existing licensed areas. The association had earlier expressed reservations about allowing multiple operators within a circle, in return for bringing a revenue sharing arrangement in place of the licence fee structure. However, a recent press statement from the association has welcomed the move to allow more operators.

For the operators this would mean an alternative to the heavy licence fee payments. For the government it means avoidance of litigation from those who missed their bids earlier, over changes in the financial structure of the contracts.

But, then, the National Telecom policy of 1999 states that the field would be limited for a few years initially so that the operators find it viable. Such a stalemate is not new in the history of telecom services in India.

As usual, wait and watch.

. also see : For list of basic and cellular operators, click here