Friday, April 1 2005 09:43 Hrs (IST) - World Time -

Washington: Slamming India, China and Japan for "excessively protecting" their telecom markets, the United States yesterday (Mar 31, 2005) threatened to vigorously enforce American "trade rights" in these countries.

"We are deeply concerned by the tepid commitment some of our trade partners have shown to competition in the telecommunications sector," acting US Trade Representative (USTR) Peter Allgeier said in Washington.

"This is especially true in countries such as China, India and Japan where national operators are already competing on a global level, but remain protected at home by relatively closed markets," he said.

It is very hard to see a legitimate reason why these markets should not be open to full and effective competition, the USTR said.

"The United States will work vigorously to strengthen and enforce our trade rights in these countries and elsewhere," he said.

USTR said, last year, India made only marginal progress in resolving a complaint related to access to and use of submarine cable capacity.

"Unfortunately, problems persist based on the continued control by dominant international operator, VSNL, over access to all but one submarine cable landing station in India."

"USTR expects more vigorous oversight by the Indian regulatory body, TRAI, and the Government of India to ensure access to and use of submarine cable capacity through facilities now dominated by VSNL."

In conjunction with encouraging measures to improve access to the Indian telecommunications market, USTR will continue to urge India to make more meaningful commitments in the new round of World Trade Organisation (WTO) negotiations to reflect the openness that VSNL benefits from markets around the world, Allgeier said.

Recent announcement that India plans to increase the permitted level of Foreign Direct Investment (FDI) in its telecom sector to 75 percent is a welcome development, the USTR said.

Undermining this liberalising step, however, is India's decision to charge a licensing fee of $ 5.7 million for international licences, to impose build-out requirements, and to assess annual fees based on revenues earned.

"None of these requirements seem justified in light of the strength of India's own international operators and the market access these operators enjoy in other markets. Such requirements, by design or effect, only serve to restrict competitive entry," the USTR said.

"We look to India to reform its licensing regime in a manner more conducive to promoting new entry, investment and competition," Allgeier said.

He comments came following a 2005 annual review by the UT office of foreign compliance with telecommunications trade agreements. The report identified barriers facing US telecommunications services and equipment providers, and laid out the specific telecommunications-related issues on which the office of the USTR will focus its efforts this year.

Another "particularly troubling" issue, he said, was "the extremely high wholesale rates" charged in some countries for calls to mobile networks.