Private telecom players are building up a business case in favour of unbundling the last mile owned by state-owned BSNL and MTNL, despite the PSUs’ opposition to the move.

In ongoing discussions on Local Loop Unbundling (LLU) held by the Prime Minister’s Office with the Ministry of Communications and industry, the Cellular Operators Association of India (COAI), as well as AUSPI have suggested ‘‘motivating’’ the PSUs into unbundling rather than arm-twisting them into it by regulation.

The business case presented by industry at the discussions is based on LLU experiences worldwide, which, they showed, have progressed much better than in India. The UK, US, European Union, Japan, Canada, South Korea and Singapore models are now being considered to bring BSNL and MTNL around to providing last mile access for a fee.

This fee, said industry executives present at the meeting, will also need to be regulated rather than decided by negotations among operators themselves. Terms and conditions for the unbundling arrangements should also be dealt with by a regulator, in view of the ‘‘asymmetry’’ in negotiation power, COAI Director General T.V. Ramachandran said at the meet.

‘‘Incumbent operators should let go of the last mile by virtue of a business model, after realising that they are gainers if spare capacity is utilised,’’ Ramachandran said.

These views seems to have chimed with the PMO and all private industry players, who have otherwise failed to convince BSNL and MTNL that unbundling can prove financially advantageous for them.

A key target for private sector players is to be able to quantify the revenue opportunities available to BSNL, which would help it make a decision in favour of sharing the last mile. Fiscal incentives from the government, which the Ministry of Communications has refused to commit to, are also a key demand from the private industry.

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