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Zasha Penn

The Department of Telecommunications was never out of trouble. But this is just too much. Cellular calls are up to 40 per cent cheaper than its landline 'intra-circle' long-distance calls.

Taking advantage of the situation several 'public call office' operators have started offering the cheaper cellular call instead of DoT's 'subscriber trunk dialling' service.

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This is a serious threat to DoT's earnings. The PCO, typically a DoT franchisee, is crucial to the government's telecom revenues. That is because most people use them to make their domestic long-distance calls.

There is rarely any other way to make the calls but through the PCO because India's telephone density is abysmally low, just about 1.2 per cent!

But now the PCO seems to have discovered a cheaper alternative in cellular services that are being offered by private companies.

The tariff being charged by cellular PCOs for intra-circle STD calls can be between 20 and 40 per cent lower than DoT rates.

Will DoT, that also makes policy besides competing with other phone companies, stand by and watch this erosion of their revenue source?

Of course not. It has already barred PCOs from using cellular services. More precisely, DoT recently asked Koshika Telecom to withdraw its cellular PCO services in the UP (East), UP (West) and Bihar Telecom circles.

Cellular Operators Association of India Executive Vice-President T V Ramachandran is now all set to counter the move with a formal request to DoT, asking it to not stop the cellular PCO businesses but allow them to continue their operations through franchisees.

"A number of developing countries are encouraging cellular service providers to open PCO booths. There is no rationale for DoT to prohibit private cellular operators from operating PCO services through their franchises,'' Ramachandran has been quoted as saying.

Cellular companies are facing cash flow problems and most have defaulted on licence fees. For such companies, cellular PCOs would have provided a chance to generate the much-needed additional revenue, industry representatives argue.

DoT holds the view that franchising cellular PCOs by means of a sub-licence is a violation of the licence agreement. DoT also believes it is an offence under Section 20A of the Indian Telegraph Act, 1885, as the holder of the licence would be contravening the conditions contained in the licence.

DoT has asked Koshika to stop the franchising of the PCOs and withdraw the franchises already given within 30 days. It has warned that if the company fails to comply with its orders its licence may be cancelled.

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