India Telecom

October 22, 2002
BSNL rolls out CellOne mobile service from Lucknow

INDIA -- Indian Prime Minister Atal Behari Vajpayee launched the CellOne cellular mobile service of the incumbent basic and NLD service operator Bharat Sanchar Nigam Ltd in Lucknow. This service will be the cheapest among the four licensed operators for each telecom circle in the country. BSNL, the government owned operator, is the third service provider in all the telecom circles while the private companies have been licensed as first, second and fourth operators in their chosen circles.

BSNL unveiled the "CellOne" brand name for its cellular service last month

With all other cellular operators spending lot of money to create a brand image, BSNL will not be far behind to project its "CellOne" service, according to CMD Prithipal Singh.

The launch is bound to intensify the competition within cellular services and is inviting criticism from existing private sector operators that BSNL is also indulging in cross-subsidization of its cellular services -- which is prohibited by the TRAI. Private operators have already asked TRAI to look into BSNL's rates after ascertaining the cost of service for its basic, national long distance and cellular services.

BSNL is charging Rs 1.20 per minute for the service while the average charges by private operators works out to Rs 1.99 per minute. Its rental is Rs. 225 per month while the others charge on an average Rs. 202. For a 300-minute basket, the existing operators charge Rs. 800 which is considered the lowest in the world. BSNL has entered the arena with still lower tariff.

Additionally, BSNL cellular subscribe will not have to pay airtime charges for long distance calls made on their cellular phone as the existing basic service network of BSNL reaches out across the country.

As the incumbent and government-owned operator, BSNL has several advantages because the license terms insist that all private operators have to route their calls through BSNL exchanges only. This involves payment of interconnect charges by other cellular operators, while BSNL does not have to pay such charges for its own cellular service. The private sector has disputed the interconnect charges BSNL is demanding and has approached the government to change the license terms and allow them to route their cellular-to-cellular calls directly, rather than through the BSNL network.

Starting from Lucknow BSNL plans to roll out countrywide cellular services first in all district headquarters (nearly 500 towns) before the end of the financial year. Including other cities where BSNL cellular services will be made available, nearly 1,000 urban centres across the country will have this service in the first phase itself. Private sector operators have already made available cellular services in 1,500 cities and towns and 60,000 villages according to the Cellular Operators Association of India.

This launch is also significant as the Power Grid Corporation of India is leasing out its optical fibre line along its grid for BSNL's use for its long distance network. This is the first time the power sector is getting into the telecom carriage.