GSM Operators: United They Fight
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Lobbying
Lobbying
The Cellular Operators Association of India (COAI) has established itself as one of the most efficient lobbying machines in corporate India. Under its able banner, the industry had successfully got a major concession from the government, when the industry was allowed to migrate to a revenue-sharing regime from a fixed licence system. On several occasions, it has been able to solve highly contentious issues with the incumbent monopolies, with the government, and with various other communications service sectors.
The launch of WLL mobile services has once again given COAI a call to do what it does best—lobbying. This time, the issues are very serious, and the risks of failing are threatening as never before. And most significantly, the opposition is equally powerful this time.
COAI has three main objectives. One, to prevent WLL service providers from operating mobile services. Two, to limit the WLL players from offering features that a full-fledged mobile service can offer. And three, to get all the concessions it can get vis-à-vis the licensor, the incumbent operators and the other service providers.
With these objectives, the cellular industry has opened the Pandora’s box. A barrage of new issues have emerged apart from several long-standing matters getting re-highlighted.
Limited Mobility
Cellular operators feel that the biggest threat to the growth and investments in the mobile sector is the uncertainty created by allowing fixed service operators to provide WLL (M) services. Not satisfied with TDSAT’s decision allowing fixed service providers to offer the WLL (M) service, the cellular industry took the matter to the Supreme Court.
On December 17, 2002, the Supreme Court decision said, "We accordingly set aside the same and remit the matter to the tribunal for reconsideration with special emphasis on the question of level playing field, on the basis of materials already on record, after hearing the counsel for the parties concerned … Needless to mention the fixed service providers will be bonded by the ultimate decision to be given by the tribunal."
Now, with the WLL (M) case coming back to TDSAT, the tribunal has decided to review the case from 24 February 2003 onwards. It seems that TDSAT will pay special emphasis on level-playing field conditions.
The cellular operators are just stopping short from saying that their view’s have been vindicated. They now are highly confident of getting level-playing field.
V5.2 Interface
COAI has insisted from the very beginning that fixed service providers should be allowed to use V5.2 interface and not A+ interface. With V5.2, feel industry experts, basic service providers cannot load more than 60,000 subscribers in a metro circle with the given spectrum, without increasing the capex to a sizable extent. Also, calling line identification (CLI) and other value-added services cannot be offered with V5.2.
On 5 March 2002, COAI had filed a petition before TDSAT to ensure implementation of the V5.2 interface as prescribed by TEC or an improved version supporting PSTN architecture only. The TDSAT adjourned the hearing of the case from time to time as the basic issue regarding limited mobility was before the Supreme Court. In the meanwhile, the TDSAT had issued status quo saying that basic service providers should ensure that the decision of the government dated 25 January, 2001, which reads as follows:
"The basic telephone service licensee may provide handheld telephone sets to its subscribers with wireless access systems subject to the condition that mobility with usage of handheld telephone sets shall be restricted within the local area i.e. the SDCA in which the subscriber is registered. While deploying such systems, the operator has to follow numbering plan of the SDCA and it should not be possible to authenticate and work with the subscriber terminal equipment in SDCAs other than in which it is registered. The system shall also be so engineered as to ensure that handing over of the subscriber does not take place from one subscriber to another SDCA while communicating."
After the Supreme Court decision on WLL (M), the cellular operators moved another application in TDSAT that Tata and Reliance were violating the status quo order of TDSAT. TDSAT clarified the status quo order and directed DoT, TRAI as well as operators to comply with license terms and conditions.
The TDSAT hasn’t yet fixed any fresh date for the V5.2 case. It seems that TDSAT will look into this case after looking into the WLL (M) case reverted back to it from the Supreme Court.
The V5.2 issue is very crucial for both cellular and basic service providers and whoever wins will have an edge over the other.
Access Charge
GSM operators have been saying that interconnect agreements are discriminatory in nature. While they pay Rs 1.20 for calling a fixed line operator the WLL (M) subscriber does not have to pay anything. As a result, cellular services are more expensive than WLL (M) services. GSM operators also say that they were unable to implement the calling party pays (CPP) model because of the access charge.
Recently, cellular service providers denied interconnect to WLL (M) providers like Tata Teleservices and HFCL, and reiterated that they were willing, able and ready to provide immediate interconnection to any or WLL (M) operators based on reciprocal commercial interconnect agreements. With this, they were trying to do two things. One, pressurize the regulator to look into this matter at the earliest, and two, stop the march of WLL (M). It can be said that they have succeeded party, considering the fact that private fixed service providers were able to add only 14,498 WLL (M) connections in the month of December 2002.
It was only after the then minister of communications, Pramod Mahajan, assured them of reviewing the level-playing field issues by requesting TRAI to finalize a ‘just and fair’ interconnection framework at the earliest, that cellular operators agreed to restore interconnect with WLL (M) operators as an interim measure.
TRAI hurriedly announced the 24th Amendment to Telecommunication Tariff order and Telecommunication Interconnection Usage Charges (IUC) Regulation, 2003 (1 of 2003). The amended tariff and interconnection charges are applicable from 1 April 2003, whereby cellular operators have to pay an access charge of Rs 0.50 per minute for fixed line calls in metro areas and Rs 0.60 (plus transit cost) per minute in the case of circle areas. For WLL (M) calls, cellular operators have to pay an access charge of Rs 0.30 per minute in metros and Rs 0.40 (plus transit cost) in case of circles. At the same time, fixed line operators have to pay an access charge of Rs 0.30–0.40 per minute for calls terminating on the cellular networks. WLL (M) service providers will also have to pay a similar access charge of Rs 0.30–0.40 per minute for calls made to cellular networks.
All this will lead to extra revenues for cellular service providers. However, in the bargain, they have to provide free incoming calls without charging anything extra. With the imposition of access charge for calls made to cellular and fixed line from WLL (M), the difference between cellular and WLL (M) tariffs will decrease. This will give GSM operators some reason for cheer.
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