The government has accepted entry rules proposed by the telecommunications industry regulator for allowing private companies into international telephony, Pramod Mahajan, minister for communications and information technology said on Thursday. "The government has decided to accept all the recommendations of the Telecom Regulatory Authority of India in regard to international long-distance telephony," Mahajan told a news conference in New Delhi.
TRAI earlier this week suggested a set of rules for the government to consider when it ends the monopoly of state-owned Videsh Sanchar Nigam and ushers in private competition next April.
The government's decision is crucial for the privatisation of state-run VSNL, which is in its final stages. The privatisation, billed as India's biggest in a decade of economic reforms, has been repeatedly delayed because of a lack of rules for the entry of private firms into the business. On Monday, the TRAI suggested the government open up the business to unlimited competition and said private firms be charged a one-time non-refundable entry fee of 250 million rupees for a 20-year licence.
The TRAI suggested the government also take an unconditional bank guarantee of the same amount from prospective entrants into the business that could be released after they meet their roll-out plans.
It also recommended that ILD service providers be required to pay an annual licence fee at 15 per cent of the adjusted gross revenue to the government. VSNL value will not be affected

Mahajan said the relatively low entry fee was in proportion to the size of investments necessary to begin offering international telephony services and would encourage several private companies into the business and help reduce tariffs.
Analysts had said the TRAI's recommendations were too lenient and could affect the bidding for VSNL.
"I don't think today's decision will have any impact on VSNL's selling price," he said adding that VSNL's infrastructure was formidable and any new entrant would take a long time to roll out the service. He said he did not expect more than half a dozen companies to remain in this business over a period of time.
Mahajan said the government had also not made up its mind about allowing other state-owned telecoms companies such as Bharat Sanchar Nigam, which offers fixed-line telephony nearly all the country, and Mahanagar Telephone Nigam, into the business.
The Indian government has already thrown open the mobile, fixed-line and national long-distance telephone businesses to the private sector as part of its drive to draw investments into the sector.
Bureau Report