India's Department of Telecommunications (DoT) doesn't just form and implement government policy. It operates, as a monopoly, India's entire phone network. Hungry for money, it is in the process of privatising. It will create an independent telecom regulatory authority, to manage cellular services - two private operators in competition in each zone, and basic telephony services.
Scared that the DoT's half a million employees may go on strike, the DoT will not itself be privatised. It will compete with one private operator in each zone, or circle - to use their preferred term. On June 7th and June 23rd the DoT announced the bids for cellular and basic services respectively. Licences for cellular services in major cities were awarded to private companies last year.
On July 31st, the technical bids from all 32 participating companies were cleared, and the first cellular service was launched in Calcutta. On August 5th, the financial bids for nationwide cellular services were opened.
CELLULAR SERVICES - PRICING
The Department of Telecommunications has set a ceiling rates for various cellular services. Many companies in the cities where operators have already been licensed initially set their rates at the highest allowed - competition will bring them down, as some providers have already started to talk about discount rates.
The DoT has specified the European digital standard, GSM, for uniform use across the country. Instruments may be purchased from cellular service providers, or elsewhere. Nokia (which has tied up with India's HCL group) and Motorola (with an established Indian presence) are likely to be popular. Prices are high - between Rs 18,000 and 30,000 (US$ 550 to 900). Service providers have indicated that they will arrange financing.
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