The Department of Telecommunications is in the final stages of giving its approval to AT&T's application for a long distance licence. AT&T has formed a joint venture company with Mahindras AT&T Global Services, where the US telecom major holds 74- per cent stake.
This is the second time AT&T is entering the Indian telecom sector.
AT&T's request had run into trouble when the DoT received complaints that the company's sister concern, AT&T Communications, was offering services without proper licences and was thus evading various taxes payable.
However, a committee, set up by the DoT to look into new applications for fresh licences, has observed that as per the existing laws, the government could not hold back grant of new licences if the applicant or its sister concerns were being examined for any violations. The committee has recommended that the two issues be treated as separate and that AT&T's application be shown the green signal. The formal approval is likely to come this week. The foray in the long distance telephony segment signals a comeback for AT&T in the Indian telecom services market.
AT&T Mobile was earlier a strategic investor in Idea Cellular along with the Tatas and Birlas. AT&T is also on BSNL's list of preferred long distance carriers.
Bharti, Reliance Communications, BSNL, VSNL and MTNL are the other players in the market. Six companies have so far been issues ILD licences nine have been given the NLD licence. Tata Teleservices, Idea Cellular, Hutchison Essar, Dishnet and Spice Communication have not yet received licence.
While in some cases, such as that of Essar Hutch, the DoT is awaiting clearances from the Foreign Investment Promotion Board, in other cases like that of Tata Teleservices, the DoT has found the application to be incomplete.
Both ILD and NLD sectors were a monopoly till April 2002, dominated by VSNL and BSNL respectively. At that time, per minute call rates were in the range of Rs 60 to the US and Rs 100 to the rest of the world.