Opening Basic Telephone Service to Competition

The purpose of liberalising telecommunications is not to generate money for government excepting by way of there being more telecom consumers from whom more service tax could be collected. The primary objective is to attract investments so that there is an abundance of telecommunications and they become more and more affordable to ever-larger sections of people. Another objective should be to enhance customer choice; that is, if a customer is not satisfied with one supplier, he goes to another.

What is good for the customer is a specified amount and quality of service to be given at the lowest price. This is what every purchaser looks for. If the government wants to avail of the services of the contractors to construct a bridge, they will award the work to the one who puts in the bid for the lowest amount. Of course, he should be judged to be competent to deliver it. So, the primary consideration for award of a basic telephone service licence should be the lowest price that one offers for a basket of services. This basket can comprise of a year’s rental; six local calls per subscriber per day and 200 STD calls in the distance slab 200 km to 500 km, one-third of them in the concession period and two-thirds in the full rate period. The price for this basket can be indexed to the retail price index so that the price rises and falls with the retail price index.