50% cut in bank guarantee for STD operators

In a major announcement for the domestic long distance (STD) operators, the government on Friday reduced the performance bank guarantee deposit by 50 per cent to Rs 50 crore (Rs 500 million).

"I have approved the proposal of the department to reduce the PBG of STD service providers by 50 per cent. The Department of Telecom would be issuing a notification in this regard soon," Dayanidhi Maran, communication and IT minister, said in New Delhi on Friday.

"The procedures are also being simplified so that the guarantee money can be quickly released once the performance is reported," he said at the International Cellular Summit.

The minister also announced 50 per cent concession in PBG in the case of those operators who complete establishment of Points of Presence in their license areas as part of their network.

With this, the guarantee amount to be deposited by the new entrants would come down to Rs 200 crore (Rs 2,000 million), an operator said on the sidelines of the conference organised by the Cellular Operators Association of India.

With regard to the crucial 'spectrum allocation' issue, the Telecom Regulatory Authority of India chairman Pradip Baijal favoured that "the spectrum should be neutral to technology and to ensure this, there should be a single spectrum allocation policy."