India Telecom

January 18, 2003
Crux of the WLL dispute

Rajendra Prabhu

NEW DELHI -- Whether President Bush goes to war against Iraq or not, our cellular operators have already shot their bolts against the basic service operators who also provide wireless local loop mobile (WLL-M) service. The TRAI, who is supposed to regulate the multi-operator scenario in telecom, has already read out the riot act to the cellular people. For those on the ringside seat, the next step will be interesting to watch.

The cellular operators are not ignorant of the TRAI Act that empowers the regulator to penalise those who disregard its directions. Even if TRAI had not referred to this provision in directing the cellular operators to restore severed connections to basic service operators, the COAI would certainly have anticipated this brahmastra in the reserve of the regulator. Why did they then take on the regulator headlong in their battle -- which is against the basic service operators, whom they accuse of operating a service similar to their own, without paying for it through their nose as the cellular people have done?

Industry analysts say that cellular operators are forcing the issue into the political arena as they feel the regulator and its appellate authority TDSAT are taking a too legalistic, too narrow view of their basic stand that WLL-M is almost the same as cellular mobile, and therefore, it has to follow the same rules as cellular. Significantly, COAI's current chief, BPL’s Rajiv Chandrasekhar in an interview said that his fellow operators have not cut off interconnection for WLL and are only asking the basic operators to pay access charges at the same rate as the cellular operators pay to the BSNL/MTNL.

The TRAI has also read between the lines in the 'open letter' that COAI published in the newspapers. That is why in its reply it said, "The objective seems to be to exercise undue influence on the decisions relating to the issues which are going to be decided in the near future by the authority or subject matters of various judicial proceedings."

The unstated reason why the COAI has decided to take on the regulator at this juncture when TDSAT is about to hear the cellular operators’ case once again is quite interesting. It is the entry of Reliance Infocomm, and providing data services over CDMA terminals, that is, mobile WLL, for a tariff a third of what the cellular operators charge. Cellular operators feel this virtually sets up CDMA-WLL as a rival to GSM with a built in advantage to the former in terms of access charges and freedom from the financial burden of the past.

There may be some truth in the cellular operators’ belief that this is more a political issue than a legal one. CDMA-WLL versus GSM-cellular: both are not shooting from the same plain. Reliance Infocomm’s entry is hurting some others also — mostly it will challenge BSNL/MTNL, who can hardly match the market aggression that the private sector is capable of. BSNL/MTNL have decided not to lower their tariffs in response to Reliance’s tariff base. The cellular operators say that the public sector telecom service units have enormous internal strength with their annual revenue of nearly Rs. 30,000 crores. The cellular operators are already carrying a loss of over Rs. 7,000 crores. The charges after the recent cuts are the lowest in the world. With annual losses of over Rs. 800 crores, the industry is at a crisis point. Therefore, like a surrounded battalion, they are all for a break-for-hell attempt.

The TRAI says that the impressive growth of cellular subscriptions negatives the COAI complaint that introduction of WLL has damaged the cellular industry’s prospects. 'Market competition has played its part in bringing it this far' on the road to consumer friendly tariffs, the regulator points out. The service can also be made more affordable, TRAI agrees. It promises to continue paying 'equal, unbiased care and attention' to all the issues like affordability, level playing field, etc. That is the regulator’s answer to the charge of bias.

However, the assertions of TRAI, do not wipe out the impression that the regulator is not fast enough, is not fair enough and is too much beholden to the government in its approach. It could not have shut out the advantages of a new technology just because the cellular industry had to be taken care of. The issue is much larger, point out industry analysts.

The TRAI has original jurisdiction in regard to advising the government on policy matters. If the operators who had been given licenses and the issue of the burden of past payments been tackled on an equitable basis vis-a-vis new entrants, who did not have to pay heavy fees, the heart burn would not have arisen in the first place.

The current war between the different players is underlining the need for grappling with the issue of a single license for all services without any loss of time. The TRAI says that it takes note of the popular opinion but cannot be driven solely by that. It knows its direction and moves accordingly. True, TRAI is not an elected body and has to go by making it evident that it is fair in its decisions. It may also be right, but the fact is that sections of the industry do not agree with this self-righteous assertion.

The very fact that the Supreme Court asked the TDSAT to reconsider its verdict on the specific issue of level playing field tends to give credence to sections of industry that both TRAI and the appellate authority did not convince informed opinion that they were fair, while considering the level-playing field issue in allowing WLL-M.