NEW DELHI, July 28: The VSAT operations are fast becoming unviable with the Department of Telecommunication (DoT) unable to finalise its policy on interconnectivity and other regulatory terms.

The countrywide voice and data networks using VSATs is now three years old and but for the four main players all other licence holders opted out of the business thanks to the absence of a policy initiative from DoT.

Explaining the problems confronting the industry, Telstra V-Comm CEO Abu Shafquad said, "initially, there were 13 licence holders active in the industry. This could have been a high growth area. But the DoT restrictions are such that the industry is fast becoming sick". Telstra V-Comm, which ranks second after HCL, was the first company in India to be awarded the licence to provide VSAT services.

Telstra V Comm is a joint venture of Telstra Corporation of Australia, Videsh Sanchar Nigam Ltd (VSNL) and Infrastructure Leasing and Financial Services Ltd (IL&FS). Shafquad said that the problem area for growth is regulatory. The Telstra V-Comm V-mesh product offers high quality voice and high speed data communications, he said.

The 13 operators who were issued licences for carrying out VSAT services included RPG Telecom, Wipro-BT, Shyam Telecom, HFCL, ITI, Natelco, Punwire and Zee TV. The companies in operation now include HCL, Telstra V-Comm and Hughes-Escort. The VSAT operators recently formed an association to plead their case with DoT and held discussions with the Telecom Commission chairman A V Gokak last week.

The customers are not able to get connected to DoT services in the absence of inter-connectivity. This has made VSAT costlier for customers. DoT has taken the plea that allowing free access will mean revenue loss for them. The fear of potential loss of revenue even led to DoT rejecting a VSAT proposal from Reliance Industries for their internal use.

Sources say that though the company was willing to cough up the "potential loss" of DoT, the department could not evaluate this amount and ultimately the proposal was rejected.

Operators say that there was no reason why the VSAT industry should go bankrupt in a country with such a huge potential. Big public sector companies and banks are considered sure shot customers for this service. However, the public sector is yet to take a policy decision on the subject, says Shafquad. Operators have to pay Rs 1 crore to DoT as licence fee for running the VSAT operations. The full benefit of VSAT is not availed also because of the restrictions.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.