India Telecom

September 23, 2003
Divided house on entry fee, unified license

NEW DElHI -- The Telecom Regulatory of India's (TRAI) proposals on unified licensing and an additional entry fee for WLL (M) operators has run into trouble with the two concerned parties -- Cellular Operators' Association of India (COAI) and Association of Basic Services Operators (ABTO), assuming strong, opposing stances.

At a recently held Open House organised by TRAI, the COAI contested the proposal saying it was uncalled for and that "there was no rationale for introducing an unified license." A spokesman for the cellular operators said: "The entire plan seems to be legalize the limited mobility [WLL (M) or wireless local loop - limited mobility] into full mobility and do away with the differentiation between the two kinds of services and favour certain operators. The regulator wants to take off the camouflage." The exercise, he contended, seemed to give the benefit of full mobility to fixed service licenses.

The ABTO strongly favoured unified licensing. Besides, a TRAI spokesman contended, "Such a license will increase teledensity, and will be a forward-looking move that will free the telecom sector of the current spate of excessive litigation.

In an earlier session on recommending additional entry fee on WLL (M) operators, the WLL (M) operators said mobility was very much a part of their license and there was no ground for additional fee. They said it would burden them, distort their services and reduce affordablity. Mahendra Nahata, Group chairman, HFCL, a basic services operator, came out strongly, saying: "Cellular operators were never asked for any additional even as the SMS facility on cell phones finished the paging industry completely. The same logic should be applied here also."

A Reliance spokeswoman added that cellular operators had been allowed to operate STD PCOs. No entry fee was charged from them for providing the service. Similarly, there was no justification for WLL (M) operators to pay any additional entry fee.

Contering the WLL (M) operators' contention, TV Ramachandran, director general, COAI, said: "WLL (M) is a value addition to their basic services. They should not only pay additional entry fee, but also the average of the three cellular license fees (except MTNL and BSNL) should be taken as a benchmark for considering the additional fee to be levied on basic operators for WLL services." He further added: "We (cellular operators) were expected to break even in the next two to three years. Now, we don't know when it will happen. We may continue to make losses for many years."

Virat Bhatia of AT&T took the opportunity to remind the house that the government had allowed dual spectrum use for the first time only in September 1999. Way back in 1992-93, when cellular operators were starting to discuss offering services, they had been prohibited from using CDMA. Countering a charge that the GSM operators had initially charged Rs. 16.80 per minute, he added that it was in the license. It was not something the operators had done themselves, as the government had asked them to do so. Umang Das of Spice Telecom pointed out WLL (M) should be purely limited to use within an SDCA.

Citing that the interests of consumers weren't being looked into, Anil Kumar, from Telecom Watchdog, a consumer interest group, raised the questions: "As consumers, are we prepared to pay higher tariff for WLL (M) services? Also, if we support the proposal on unified licensing, the tariffs will shoot up."

A spokesperson from another consumer group added that the consumers felt cheated by the government, as it seemed as though it had taken a decision to please one particular operator. He added: "The Rs. 9,000 crore license fee [jointly paid by the three cellular operators for the GSM licenses) was paid by the consumers. It must come back to us -- the consumers."

Anil Prakash of the Telecom Users Group added that WLL (M) operators were misguiding customers, and that no one had a clear idea of the exact exit fee. Mahesh Uppal, telecom consultant drew attention to the advertisements published by WLL (M) operators in the leading dailies, saying that the words fixed and limited were missisg from the ads. He added that the overwhelming message that emerged was that the consumers themselves did not have sufficient information.

It may be recalled that last month, in a landmark judgement, the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) had ruled that an additional fee be levied on the WLL (M) operators. The TDSAT judgement ruled that WLL (M) services were creating great disturbances in the level-playing field in both services. It ruled that WLL (M) was a value-added service; the regulator (TRAI) and the government must enforce the limitations placed on WLL (M) within a timeframe; no effort was ever made by TRAI or government to cellular operators that they too could run basic services. Subsequent to the TDSAT verdict, TRAI had recommended to the government that limits on WLL (M) such as preventing multiple registrations in multiple SDCAs (short distance charging areas) to bypass the limits and stopping call forwarding. TRAI's move will hit WLL (M) operators such as Reliance Infocomm, denying them roaming facility.

Either way, a long battle is on the cards over both of the issues, and if the matter does go back to the apex court, the government itself might have a lot of explaining to do.