STD operators’ bank guarantee cut by 50 pc

In a major announcement for domestic long distance (STD) operators, government on Friday reduced the performance bank guarantee (PBG) deposit by 50 pc to Rs 50 crore. The move is aimed at stepping up competition in STD services so as to bring rates down further. ‘‘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 his first major announcement as the new minister.

‘‘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. Maran also announced 50 pc 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, an operator said. Earlier, STD operators who paid Rs 100 crore as licence fees, were under obligation to roll-out their services in four phases, which included establishing a point of presence and ended with meeting roll-out obligations. For each of the phases, a PBG of Rs 100 crore had to be provided. Now, instead of Rs 100 crore, they will only have to pay Rs 50 crore.