Business

A Jungle Of Tones

The TDSAT draft leaves fuzzy areas of law, but it has both cell and WLL players upbeat. Meanwhile, the market booms.

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A Jungle Of Tones
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Surprisingly, the cellular operators who had vociferously opposed WLL are also happy with the order. They feel TDSAT has imposed several restrictions on WLL providers. But even as both sides claimed victory, the tussle between the two technologies has moved to different fronts. Thereby paving the way for further battles—both in the marketplace and the corridors of power.

Industry observers feel the TDSAT judgement will push the telecom sector closer to a unified licensing regime, where a single licence will be enough to offer any service and technology. A draft policy has been circulated by the telecom regulator, TRAI, and Union communications minister Arun Shourie is believed to be personally convinced about its efficacy. Says a spokesperson for Reliance Infocomm, which offers WLL, "We believe the order is a natural progression to a unified regime."

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But this too is being opposed by the cellular industry. In fact, they have stayed away from the consultation process on TRAI’s draft. Says a senior manager in a cellular firm: "The premise on which the concept is based is faulty. Unified licensing will kill competition and goes against TRAI’s contention that even small operators should survive and make profits. It’s just a disguised way to legalise full mobility for WLL operators."

Therein lies the catch. Ideally, the cellular operators would like to kill WLL. Now that this has become difficult (after the TDSAT order), their next step is to ensure that the WLL services are restricted to a single city, or do not function beyond what is called the short-distance charging area (typically a 20-km radius). The reason is that if WLL providers are not allowed to offer "roaming" and other value-added services, their consumer base will always remain limited.

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In fact, the TDSAT judgement, while imposing the "distance" restriction, has instructed the government to address the issue of a level-playing field between the two operators in the next four months. TRAI has since said it will come out with a consultation paper on this issue within two weeks. The paper will obviously decide whether WLL firms can offer roaming services after paying the higher licence fees that the cellular operators paid. And whether, like their cellular counterparts, additional spectrum charges should be imposed on WLL firms. Here, the WLL firms are crying foul. They contend that it’s the basic operators (who offer the traditional landlines) who have paid Rs 3,840 crore as entry fee and bank guarantees, compared to Rs 1,885.66 crore paid by the cellular companies.

The regulator will also have to address another problem: whether limited mobility players can use mobile switching centres (MSC), which currently give them the flexibility to provide roaming and sms. Says S.C. Khanna, Association of Basic Telecom Operators (ABTO) director-general: "Our licensing clauses don’t say that we cannot use MSC. It says state-of-the-art technology has to be used and MSC is the latest technology."

Cellular operators believe otherwise. Says COAI director-general T.V. Ramachandran, "TDSAT clearly states that it accepts the recommendations of TRAI, which prohibits the usage of MSC It cannot go back on this." The TDSAT ruling stated that WLL operators did not have any express permission to use mobile switches. So, there are still many battles to be fought on the nitty-gritty concerning the telecom policy. And TDSAT has only cleared the cobwebs on some of the macro issues.

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Just be rest assured that these would be as murky, aggressive and jargonistic. The telecom space will be filled with claims and counterclaims, and legal arguments that only a few understand. For, this is a war where the very survival of the players is at stake. If WLL can offer roaming at little extra cost, most of the cellular firms can say goodbye to their aspirations. If it’s not, WLL bigwigs like Reliance and the Tata group might end up as minor players. And that would irk Reliance, which has already spent thousands of crores to chase its telecom dream.

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Listen to some of the battle cries and you may understand how important these issues really are. "This clears the air and takes away the uncertainty about the service amongst a section of the subscribers. This is a vindication of our stand that we are conforming to licence conditions," says a charged up Amit Khanna, the Reliance Infocomm spokesperson. Adds an enthusiastic S.C. Khanna: "This is the clearest it can get. The Supreme Court did not stop WLL earlier and now TDSAT has overwhelmingly upheld it. What more do we have to do to prove our legality?"

COAI’s Ramachandran quickly points to some of the contentions raised by Justice Wadhwa, who wrote the dissenting note. "Our position has been confirmed by Justice Wadhwa that legally there is no such thing as limited mobility," maintains COAI. In the 135-page judgement, Justice Wadhwa said it is difficult to accept the proposition that limited mobility is value-addition to WLL service even if the nature and feature of this service are qualitatively different from that of a cellular mobile service. His attack on TRAI was particularly scathing—TRAI failed in its role as an expert independent body and its interpretation of the 1999 telecom policy does not appear to be rational or logical, he writes.

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The cellular operators, initially keen on challenging the TDSAT order in the Supreme Court on the basis of Justice Wadhwa’s comments, have held their horses for the time being. In an apparent change of strategy, they now plan to push for full and strict enforcement of the tribunal order that calls for making WLL a truly limited service. Says Ramachandran: "We will review the situation on a weekly basis. We are also writing to the DoT to strictly enforce the TDSAT order." At the time of going to press, COAI was giving final touches to this letter.

But both sides are now clear that the real tussle will be in the marketplace. So, all the telcos have been engaged in a mad race to grab consumers in the past few months. To give an idea, just look at the growth in subscriber base. Both together added 6.7 million subscribers in the first four months of this fiscal. This, incidentally, was higher than what they added during the whole of 2002-03 (6.5 million). While cellular operators got 3.6 million new users, the rest went to WLL providers.

This fight is also prompted by the fact that if the WLL subscriber base keeps getting larger, it will become tougher for any court, regulator or policy maker to stop the service. Asserts Reliance’s Khanna: "We were spending a lot of energy in litigation. Now we can concentrate on services. If we concentrate on growing the market, we’ll be able to achieve the teledensity targets of the 10th Five Year Plan way ahead of schedule." His confidence stems from the belief that the TDSAT restrictions will make little difference to their services. "We believe the order does not in any way alter the scope and quality of services which our customers have been enjoying so far."

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Forget what’s happening around you for a moment, and look above the horizon. You’ll see a new battle front opening, this time on policy issues. As the warring factions use the TDSAT judgement to draw daggers, Parliament is inching closer to passing the Convergence Bill, which will probably negate everything, including the idea of a unified regime. That process too is likely to witness a fresh round of debates and legal recourse. Looks like the polyphonic tones will keep ringing in your ears—forever.

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