BUSINESS

Ending discordant rings?

Are telecom policies and regulations headed towards a resolution of the contentious issues that got them the bad name in the first place?

There are reasons for such optimism even at a time the Government has been hauled up by the appellate authority, TDSAT (Telecom Dispute Settlement Appellate Tribunal), over the non-implementation of the licensing conditions in the WLL controversy. The limited mobility that Reliance and the Tatas have been allowed to provide on their fixed telephone services has allegedly been abused (especially by the former) to the detriment of the cellular operators. Reliance itself has built up a subscriber base of over a three million recently. Its marketing pitch has included "mobility" not just within the SDCA (short-distance calling area, as stated in the licence) but also for all practical purposes "roaming" as provided by the cellular operators.

They are able to do this by multiple registrations and call forwarding, which according to them are not forbidden in terms of their licences. The TDSAT majority verdict, while not forbidding multiple registrations, found fault with the Government for "not providing adequate information to ensure strict conformity by service providers to the rules of limited mobility". Which simply means that the Government (here the Department of Telecommunications) while being aware that one big player has violated the spirit if not the letter of the law has chosen to look the other way. That in brief is the crux of the raging controversy over the introduction of WLL technology for a wider purpose than visualised earlier. The appellate authority has allowed the WLL providers to continue using mobile switching centres, a type of architecture, which critics say can provide much more than "limited mobility". However, the appellate authority has castigated the Government for not making Reliance adhere to the licensing norms — by virtually operating a mobile service on a basic licence. There has been a loophole, which has been exploited. Equally significantly the Government has, so far at any rate, chosen to remain silent, notwithstanding the rulings of the appellate authority. The fact that Reliance has built such a large subscriber base is another major factor. Is it possible to offer them only those services that are strictly in accordance with their licensing terms, sans mobility, without risking another bout of litigation? The lingering WLL controversy more than any other represents all that could go wrong in an ambiguous policy environment.

There seems to be only one way out — by moving towards an unified telecom licensing. The Group of Ministers (GOM) has been at the task of working out the modalities.

However attractive it seems the proposal bristles with its own type of controversies right from the beginning. The major obstacle is in evolving the monetary parameters. How much should limited mobility players be made to pay to become a full-fledged mobile operator in a de jure and de facto sense?

The cellular players have consistently opposed a unified licence. According to them it legitimatises the back door entry of limited mobility players into the mobile segment. The Telecom Regulatory Authority of India has been given the task of preparing a roadmap .The task everyone acknowledges is not going to be easy, given the past distortions.

In a related development the Government recently increased the cap for foreign institutional investors in the telecom sector by another 25 per cent while retaining the foreign direct investment cap at 49 per cent. That along with the more liberal policy dispensations should pave the way for consolidation through mergers and acquisitions. Clearly, the market dynamics characterised by an explosive growth in the subscription base of all categories of wireless services indicate that only those with deep pockets will stay in the race. A unified licence regime if and when it comes will surely benefit the bigger players.