The Hindu : Untangling the crossed wires

Online edition of India's National Newspaper
Tuesday, Aug 12, 2003

Opinion

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Untangling the crossed wires

THE LONG AWAITED verdict of the Telecom Dispute Settlement Appellate Tribunal (TDSAT) on limited mobility services is unlikely to satisfy either of the litigants — the cellular operators and the basic (fixed line) operators. However, in its immediate aftermath, both sides are claiming victory of sorts. For the basic operators the legality of the limited mobility services has been upheld by the majority judgment, which has ruled that the WLL services are just value-additions and not a new type of service requiring additional regulatory barriers. The cellular operators' long-term plea for a level playing field has been recognised by all the three members of the appellate authority.

For the telecom users too, the TDSAT's verdict is a mixed bag. The numerous WLL subscribers who signed in over the past two years are now freed from the uncertainty of a possible cancellation and can expect their service providers to upgrade their offerings. However, they will probably have to pay more even for existing services. Additional entry level fees will be levied on basic telecom operators who may also have to pay for additional spectrum charges to provide limited mobility services. Further, the appellate authority has by defining the range of WLL mobility — it cannot spill over to another short-distance calling area — probably curtailed its usage and therefore its appeal. The larger number of cellular subscribers can look forward to better connectivity in the short term. Over time, as the uncertainty generated by litigation recedes and as the moves towards a unified licensing regime gather pace, all types of service providers are likely to reap the benefits of economies of scale and pass on important cost advantages and value additions to their subscribers. However, for all the positive inferences that can be drawn from it, it is likely that the TDSAT verdict will be appealed to the Supreme Court, keeping intact the reputation of the telecom sector as the most litigious among all the sectors in the newly opened up infrastructure area. Interestingly, the appellate authority has been adjudicating aspects of the WLL issue after having its order of December 2001 referred back to it by the Supreme Court.

A deeper scrutiny of the TDSAT verdict shows that it does more than legitimate the WLL services. It is a step forward in unravelling the mess into which telecom policy has been dragged by various players. The controversy over limited mobility has been just one, if an obstreperous, manifestation of the underlying policy shortcomings. There has been an ongoing regulatory search to find a solution to the equally vexatious problem caused by what is known as access deficit charge (ADC) — the compensation payable to the basic operators, in the main public sector companies BSNL and MTNL — for providing below cost services to many sections of society. That is a legacy issue that has defied all solutions. Competition, which is now a reality in all segments of telephony, has rendered the regulator's role more complex. The rapid decline in long-distance telecom charges, in the wake of the opening up of the sector, has reduced one important element of cross-subsidy available to the basic service providers. Technology has been a key driver of telecom changes. It has posed tough challenges to the telecom regulator, TRAI, which has in the recent past not been particularly proactive. The most publicised technology-led regulatory challenge has come with the arrival of WLL services using a CDMA platform by Reliance and others. The TDSAT order ought to be a starting point for ushering in not just unified licensing but a more relevant telecom policy that is fair to all the stakeholders.

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