TRAI press release:
TELECOM REGULATORY AUTHORITY OF INDIA
PRESS RELEASE
(8th January, 2001)
TRAI SENDS ITS RECOMMENDATIONS ON “LIMITED MOBILITY” WITH USE OF WIRELESS IN LOCAL LOOP BY BASIC SERVICE OPERATORS
I. Background
TRAI today sent its recommendations on the provision of limited mobility through use of Wireless in Local Loop in the Basic Service network. The Authority’s recommendations were finalized following its established practice of examining policy issues through a consultation process, and careful consideration of the inputs received from various stakeholders in this process.
TRAI’s recommendations reflect its emphasis on the interests of consumers, such interests being sustainable long-term interests in terms of cost and quality of the product used by the user. The recommendations also reflect TRAI’s views that consumers should not be denied a facility that can be made available through technological advancement, especially if any likely adverse effects relating to level playing field among service providers can be mitigated through policy initiatives. TRAI has stressed that there is no better way to serve the consumer than through an open, fair and competitive market. In TRAI’s opinion, providing limited mobility through WLL would be in the interest of both customers and the operators.
II. The Main Recommendations
TRAI’s recommendations cover a number of related aspects, namely whether limited mobility should be provided through WLL, the extent of such mobility, tariffs for WLL with limited mobility, allocation of and charge for frequency spectrum, and various other aspects pertaining to level playing field and mitigation of likely adverse effects for Cellular Mobile Service Operators (CMSOs).
TRAI has also issued today a Determination on Interconnection which resolves some long outstanding issues relating to points of interconnection and sharing of revenues between CMSOs and the Basic Service Operators (BSOs).
(a).Regarding mobility through WLL provided by Basic Service Operators, TRAI has recommended that:
(i) Limited mobility should be allowed for WLL provided by Basic Services Operators. The extent of mobility should be within the local area, i.e. the Short Distance Charging Area (SDCA).
(ii) WLL with limited mobility should be provided as part of Basic Service License.
(iii) The entry fee and license fee as a percentage of revenue should not be altered and should be as already recommended for Basic Services.
These recommendations are based, inter alia, on the fact that WLL mobility is not the same as that of the Cellular Mobile Services, and that customers should not be denied the benefits provided by technology if the disturbance expected in the level playing field can be addressed by making some necessary policy changes. Further, WLL service is a by-product of Basic Service.
Under present circumstances, providing full mobility through WLL will pose a number of techno-economic and regulatory problems, including those relating to Numbering and Charging for Basic Service calls. These problems suggest that the scope of mobility with WLL should be limited to local area only. Also, for Wireless in Local Loop (WLL), a “local loop” service has to be within the limits of the local areas and NTP 99 has discussed WLL in the context of the last mile connectivity which literally means the local areas or the SDCA.
(b). Regarding tariff for WLL with Limited Mobility, TRAI has recommended that:
(i) All calls from mobile WLL should be charged at the highest Basic Service call charge, e.g., Rs. 1.20 per 180 seconds for local calls.
(ii) The rental charge which will be cost based will be fixed by TRAI in the next three months, taking into account the relevant costs of the last mile connections through WLL.
(iii) Other tariff items (other than rental and call charge) should be those specified for Basic Services (excluding ISDN) in the Telecommunication Tariff Order 1999.
These tariffs emphasise the provision of WLL with limited mobility as part of the Basic Service. Thus, the tariffs are specified within the framework of the Basic Service tariff structure.
(c) Regarding allocation of and charge for frequency spectrum, TRAI’s recommendations are:
(i) Basis of allotment and pricing of frequency spectrum, while being in accordance with the national plan, should be the same for both BSOs and the CMSOs.
(ii) For WLL, no change in methodology for frequency allocation is proposed. As Basic Service tariff rates will continue to apply for wire-line as well as WLL fixed and hand held terminal mobility operations within the SDCA, TRAI does not recommend any additional Entry Fees for the Spectrum. Existing mode of charging for spectrum should be applied for new operators also.
(ii) WLL frequency for Basic Service Operators should be same as already allotted to them in 800/ 900 MHz Band and 1700/ 1900 MHz Band in the NFAP-2000, and also as contained in the existing Basic Service License.
(iii) So as to increase competition among BSOs in a service area, the CDMA Band of 20 MHz in the 800/ 900 MHz band should be distributed among four operators in each Basic Service Area i.e. 5 MHz each. This is necessary because the present proposal to allot 8 MHz to each operator will limit the competition to only 2 operators, i.e. to a Duopoly market structure which is not in the interest of consumers.
(iv) Four more BSOs can be accommodated through Micro-Cellular technology in the 10 + 10 MHz spot reserved for WLL in 1800/ 1900 MHz Band.
(d) Other recommendations to address issues of level playing field:
(i) Revenue share as license for the CMSOs should be prescribed at 12% of the annual revenue, i.e. the same revenue share as prescribed for BSOs in Metros and Category ‘A’ Circles.
(ii) CMSOs may be permitted to provide fixed phones based on their GSM network infrastructure. Their services can be of help in providing telephone connections in the rural areas and in case they provide such telephones which will qualify for the USO funding, these may be considered as entitled thereto in the same manner as that of a BSO.
(iii) TRAI’s Determination on Interconnection issued separately today provides, inter alia:
(1) Number of Point of Interconnections (POIs) with BSNL/ MTNL to be increased to cover all Level I and II Trunk Automatic Exchanges and tandem exchanges in Metros. Interconnection is to be provided
within 3 months of the request being made. If for any reason, it cannot be done, the matter will have to be reported to the expert
Committee working under the aegis of the TRAI, who will then look into the reasons for the POI being delayed or not granted. TRAI taking all facts of the case will, then, determine the issue.
(2) CMSOs may retain 5 per cent of the total amount of long distance calls and other revenues that CMSOs collect from their subscribers and pass on to the BSOs for carrying the call. This would cover their collection costs and bad debts.
III. Consideration of Views of Those Opposed to Limited Mobility for WLL
TRAI expects that with lower tariffs, the market base of CMSOs would increase significantly, and this would help to substantially make up through increased volumes the revenue losses due to reduced tariffs. This view is based on TRAI’s consideration of the CMSO market situation in instances where tariffs have been sharply reduced. The Authority, however, does recognize that introduction of WLL with mobility by the BSOs is likely to have an adverse impact on the ARPU and total revenue of CMSOs unless they succeed in covering the fall in ARPU by a growth in number of subscribers. Some of the Authority’s recommendations thus aim at mitigating the possible loss of CMSO’s market as a result of the introduction of WLL services with mobility by the BSOs. The recommendations also focus on providing a level playing field for BSOs and CMSOs, including through conditions relating to revenue share license fee and spectrum charges.
TRAI believes that the Cellular Mobile Service will continue to be a premium service in comparison to WLL with limited mobility, as it already has and will continue to have many additional features such as seamless roaming. Further, even before the BSOs are able to deploy mobile WLL systems fully, the third and fourth CMSOs would have entered the market with significantly lower tariffs due to reduction in per line cost of GSM network infrastructure. The main threat to the market of the existing CMSOs, is therefore, likely to come from the third and the fourth CMSOs rather than the mobile WLL operators i.e. the BSOs. In view of the forthcoming competition in the Cellular Mobile segment itself, the precise task with respect to the effect of WLL with limited mobility is one of managing the unanticipated level of competition in the immediately forthcoming years. The above recommendations aim at addressing this problem, while achieving an overall result that is beneficial to the consumer and to the industry as a whole.
(For more details, please see the full text of the Recommendations at www.trai.gov.in). |
