Verizon applies for NLD licence

US-based Verizon Business (formerly MCI) — one of the world’s largest global telecom service providers, has applied for a National Long Distance (NLD) licence under recently approved guidelines allowing up to 74% FDI in the telecom sector.

Verizon already has an application pending with the DoT for an International Long Distance (ILD) licence. It had applied for the ILD licence several months ago, which was held up due to incomplete documentation. According to DoT sources, both licences are now likely to be processed together. Verizon is fourth in a line up of global telecom service providers who have either entered or shown interest in ILD/NLD licences primarily to serve enterprise segments — global MNCs and Indian IT/Companies with global telecom networking requirements.

AT&T was the first MNC to apply for and receive NLD/ILD licences under the 74% FDI guidelines. It was also the first to launch services nearly six weeks ago. AT&T has partnered with the Mahindra group, which has interest in the IT and automobile sectors.
British Telecom BT, the second company to enter the enterprise base, has a partnership with Jubiliant Group, which has interest in chemicals and media. BT had inaugurated one of its nodes in Chennai to operate VPN/MPLS services two months ago. It is yet to launch commercial offerings in India.

Verizon’s application will place it third in the list of companies expected to compete in the VPN/MPLS (virtual private networks/managed private line services) space. UK’s Cable and Wireless (C&W) is at a very preliminary stage and has applied and sought FIBP clearance before submitting applications for NLD and ILD. The company is expected to apply for licences in the coming weeks.

The Indian VPN/MPLS market place is clearly a high growth market, which is attracting the attention not only of global service providers, but also forcing Indian telcos to rethink their strategies.

Bharti, a major domestic player and BT’s partner for such services, recently announced an alliance with PCCW specifically for the provisioning of VPN/MPLS services with extended international connectivity.

AT&T and C&W have partnered VSNL and are engaged in bandwidth purchase from their former partner. BT currently partners with Bharti and Verizon with Reliance.