Limited Mobility, Unlimited Competition
WLL technology will not only help increase teledensity even in remote and rough terrains, but would also allow basic service providers to offer cheap, limited mobile services. Cell operators aren't happy, naturally.
By Sudhir Chowdhary
Competition is rife in the mobile telephony space. Freedom, choice and simplicity as the inspirational promise for wireless communications of the future, never has the wireless market become so volatile in India. With basic service providers now being allowed to offer limited mobile services using wireless in local loop (WLL) standards to their consumers, this new element of competition has upset the cozy duopoly of cellular operators in the country. Worse, it has thrown all their bottom line forecasts into disarray. A WLL handset will be available at Rs 6,000 at the entry level and Rs 15,000 on the higher side. The good news is that the prices compare favourably with cellular handsets and, of course, the service costs only Rs 1.20 for a three-minute pulse. Along with free incoming calls.
WLL Power
« Limited mobility would be allowed for WLL provided by basic service operators
« Extent of mobility only within the local circle
« Service charge to be Rs 1.20 per minute per 180 seconds for local calls
« Incoming calls to be completely free
« Cellular operators compensated by lowering annual revenue sharing from 17% to 12%
« Mobile operators also to retain 5 per cent of the long distance call revenues
For existing cellular service providers, they have been hit by wave after wave of telecom deregulation moves. First came the confirmation that the stage was being set for the entry of fourth cellular operator, the third one being public sector Mahanagar Telephone Nigam Ltd. However, the biggest blow came when basic operators were allowed to offer limited mobility. This, in effect, means fixed line operators can now offer mobile services within a geographical area. Except that the technology is different from cellular services. Matters worsened when MTNL unveiled its mobile telephony tariffs, which are far cheaper than those being charged by the private cellular operator. The results were immediate: all cellular operators rushed to lower their rates.
But for cellular mobile phone operators, the problems don't stop here. With the roll-out of WLL mobile services, prices will crash to local call levels of Rs 1.20 per minute. Waiting in the wings to do just this are Hughes Tele.com, HFCL Infotel and Reliance Telecom. Mumbai is the first such city which may see the first limited mobile services from basic operator Hughes Tele.com.
Why Limit Mobility?
The decision to allow basic service operators 'limited mobility' through the WLL platform is a step in the right direction. The change acknowledges the inevitable march of technology and clearly favours consumers. Cellular telephony charges are at least 10 times as high. Services using WLL platform differs from conventional cellular phones in the sense that India's cellular networks use the European GSM standard, while WLL networks use a technology called code division multiple access, or CDMA. Though CDMA networks are capable of full-fledged mobility, India has decided to cramp WLL operations: services can be used within short distance call areas (50 kms). The abridged CDMA technology won't permit roaming or calling from vehicles that move faster than 25 km per hour. In return for this deliberate constraint, rates will be low-WLL calls will be as cheap as fixed line rates.
From the regulatory perspective, if the Government can achieve the objective of increasing teledensity at an affordable cost to the consumer, there is little reason to delay the introduction of the facility in the country. However, was the move justified in restricting it to limited mobility using WLL only within the short distance charging area (that is, local area), without extending it to the full telecom circle for basic service operators? This decision was probably due to a number of techno-economic and regulatory constraints (such as availability of spectrum) that still exist.
Then, with limited mobility within the local area, to what extent will the cell operators be forced to push down their tariff? The TRAI's recommendations specify that there is a significant difference in the scope of the two services in terms of coverage and facility, such as seamless roaming, both nationally and internationally, as well as a large number of tele-services and supplementary services which the GSM network is capable of offering, and which the basic service network is not. However, it is questionable whether this assessment will hold as only a few cellular users opt for roaming facility. These users should find the WLL facility providing value for money.
TRAI has also estimated a 10-20 per cent reduction in the revenues of cellular operators as a result of the limited mobility, and used that to justify reduction in the revenue share of cellular operators from 17 per cent to 12 per cent.
Leading the Way
According a telecom analyst, in India, there are two distinct markets for WILL: the Bharat Sanchar Nigam Ltd (BSNL) market and the private operators'. BSNL has already taken a decision to introduce WLL-based systems in its networks throughout the country. It is estimated that over the next five years, the domestic WLL market will have between 2 million and 2.5 million subscribers. Private basic operators too are looking towards deploying these WLL systems. So far, five operators have signed the licence and are in different phases of their implementation.
WLL services are likely to be offered in highly populated cities. The features on WLL handsets are not yet comparable to their cellular counterparts. WLL handsets will come with plain vanilla voice-related features unlike GSM phones, which have progressed from messaging services to becoming Internet-enabled. The features on a WLL handset are limited, much like the service itself.
It is estimated that a trillion dollars will be spent the world over on the local loop over the next 25 to 30 years and, although the transition to wireless will be slower than thought, it is inevitable that most of that will be spent on WLL. Truly, the country seems to be leapfrogging into the latest technology and catching up with next generation communications networks. |
