The Telecom Regulatory Authority of India plans to come out with a consultation paper on a unified licence for long-distance services, both national and international, next week.

Once the consultation process is through, existing holders of telecom licences -- like cellular or even Internet service providers -- will be allowed to offer long-distance telephony on their networks just as basic operators are now to be allowed to provide cellular services, and vice-versa.

The Cabinet cleared the proposal to unify cellular and basic services last week.

At present, STD facilities are offered by Bharat Sanchar Nigam Ltd, Bharti and Reliance; ISD facilities are offered by Videsh Sanchar Nigam Ltd, Bharti, Reliance and Data Access.

The size of the two markets is roughly around Rs 25,000 crore (Rs 250 billion) today.

A top Trai official said that under the new licence regime, those offering STD and ISD facilities would have to make their networks available to other users as well, in exactly the same manner as is done now.

"Our paper is ready and we will issue it within the next few days," the official added.

Though the companies offering STD/ISD facilities will certainly oppose the move, Trai is confident it will be able to issue unified licences.

Its confidence is based on the fact that the biggest STD player in the country -- BSNL -- is a government-owned firm and will not protest too strongly.

Also, the two other players -- Tata and Reliance -- that could lose from the decision to allow other  players in their business, have benefited from last week's move to unify cellular and basic services, and so they will find it difficult to oppose unification of STD and ISD services.

The firm that will be most affected by the move is Data Access -- a pure-play international long-distance telephony operator.

While firms offering cellular telephony will also benefit from the move, in that they will now be able to offer STD facilities on their own networks, the extent of the benefit will depend upon whether they have contiguous licence areas.

If a firm has a licence in Maharashtra and another in Haryana, for  instance, it will not benefit as it will have to approach another player to route the calls.

If, however, it has licences in neighbouring states, like Haryana and Punjab, it will be able to carry inter-state calls on its own network, and will benefit from the fact that it will not have to pay STD revenues to other service providers.

Bharti, which has several contiguous licence areas, and will theoretically benefit the most from the move, has already obtained an STD licence.

It is not clear, however, whether telecom companies are going to majorly benefit from the move.

This is because both STD and ISD licences are available off the shelf and there is no great rush to buy them.

While an ISD licence costs Rs 25 crore (Rs 250 million), an STD licence costs Rs 100 crore (Rs 1 billion), along with a bank guarantee of Rs 400 crore (Rs 4 billion).

So, even without a unified licence, a telecom firm can buy either of licences, if it thinks the profits are worthwhile.

New regime

• Unified STD\ISD licence will be in the lines of the unified licence for cellular and basic operators.
• Cellular players like Bharti, which have contiguous licence areas in several states, are expected to benefit the most from the move.
• Data Access, a international long-distance telephony pure-play, is likely to be affected the most.