DoT sets terms for private STD firms - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

DoT sets terms for private STD firms

Mar 9, 2000

The Department of Telecommunications (DoT) has prescribed a minimum revenue share of 15% as annual license fee for companies venturing into national long distance services. The DoT has also stipulated that there will be no reserve price for the bids. The Telecom Regulatory Authority of India (Trai) had earlier recommended that there should be a one time fee of Rs 5 bn and revenue share of 5%. The Trai had also suggested that the new entrants have a minimum net worth of Rs 25 bn and have experience in this field. While the DoT has accepted the minimum net worth criteria it has done away with the experience requirement.

With the DoT laying out the rules for entry into the long distance telephony sector, the process of private sector participation has moved a step further. Among the most interesting and noteworthy recommendations is the choice given to the consumer to select a service provider for making a STD call.

The opening up of the domestic long distance telephony services is the next big step in the government's endeavour to open telephony services to the private sector. Earlier private participation was permitted in the domestic basic (local) telephony services. The government also permitted private players to offer cellular telephony services in regions across the country. Now with the STD market opening up, the process will be all but complete.

Although the size of the market is very large it must be borne in mind that the Trai has implemented a three-year tariff reduction plan, the first part of which was implemented last year. Under this plan, the tariffs will be reduced by 42% over this period. This is likely to put pressure on realisations unless the volume growth picks up dramatically.

Equitymaster requests your view! Post a comment on "DoT sets terms for private STD firms". Click here!


More Views on News

Bharti Airtel Q4: Back to Quarterly Profit on Subscriber Additions & Data Usage (Views On News)

May 18, 2021

The company swung to quarterly profits as it added more subscribers and amid increased data usage.

Why Did Tata Communications Shares Plunge Today? (Views On News)

Apr 29, 2021

Key takeaways from Tata Communications Q4FY21 results.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Jun 17, 2021 (Close)