The Department of Telecommunications (DoT) has announced a reduction in the domestic and international long distance (ILD) annual licence fee to 6 per cent from 15 per cent. It has also lowered the one-time entry fee for new national long distance (NLD) operators to Rs 25 million from the existing Rs 1 billion and for new ILD operators to Rs 25 million from Rs 250 million. DoT also announced that fixed line operators can provide internet telephony. The new licence conditions would be applicable from January 1, 2006. If the ILD and NLD operators pass on the benefits to the consumers, the tariffs should be reduced by 9 per cent.

Currently, there are only four NLD operators –­ Bharat Sanchar Nigam Limited (BSNL), Reliance, Tata and Bharti –­ and only three ILD operators –­ Reliance, Tata and Bharti. Once the new long distance policy is put in place there should be more competition in the sector.