The government on Tuesday approved AT&T Global Networks Services India's letter of intent (LoI) for licence in international and national long distance calls.
The entry of AT&T may not have an substantial impact on either tariff or quality of long distance calls.
The committee that approved the LoI said the company is a sister concern of AT&T Global Networks Holdings Lcc and AT&T Communications Services India Pvt Ltd and not the parent company. The US-based AT&T Global Networks holds 74 per cent equity in AT&T Global Networks India.
The committee also said the department of telecom (DoT) is investigating allegations of AT&T Communications Services India providing telecom services in the country without proper license and thereby evading taxes.
A statement issued by the committee said: "Denying or delaying the license to the applicant may not stand scrutiny of law. In the highly competitive Indian telecom environment, any delay in the grant of license will adversely affect the company."
Ever since the ILD sector was opened up in 2002, tariffs have dropped significantly from Rs 60 per minute for calls to the US to as low as Rs 6 per minute today.
The IPLC has also been growing at 80-100 per cent over the last four years.
Most ILD and NLD providers that have applied for licenses are non-facility based operators and will route their calls on the existing undersea cables controlled by VSNL and Bharti.
Reliance Communications recently won an arbitration case and VSNL has been asked to allow access and upgrade of the FLAG cable in India. The company has also announced to upgrade the cable by 140 GB.