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Limited progress

THE DEADLOCK OVER the provision of limited mobility service using the Wireless-in-Local-Loop platform is nowhere near resolution. If the Group on Telecom and IT Convergence, set up under the directions of the Prime Minister, was expected to resolve this impasse through its recommendations, it too appears to have failed. On the contrary, the GoT-IT recommendations have only added to the confusion that prevails over the introduction of this service.

One of the key recommendations of the GoT-IT is the equalisation of the revenue-sharing arrangement between fixed service providers and long-distance carriers in line with the arrangement between cellular service providers and long-distance carriers. The GoT-IT recommendation states that the basic service providers offering limited mobility using WLL will pay 95 per cent of their revenues to BSNL/MTNL as interconnect tariff and retain only 5 per cent, compared to 40 per cent paid to BSNL/MTNL and 60 per cent retained currently. This has thrown a spanner into the works of basic service operators, which had planned to offer limited mobility services at Rs 1.20 for a three-minute call by cross-subsidising their revenue share from long-distance services. T hough, prima facie, this sounds like a good recommendation, most of the fixed-service operators which had showed interest in the WLL policy, are of the view that under the proposed revenue-sharing arrangement of 5:95, they would not be in a position to o ffer limited mobility services at Rs 1.20 for a three-minute call. Hence, the interest (with 147 applications received from 18 companies for WLL licence) shown by major basic service providers in the first round may not be sustained in the subsequent pha ses. Second, in the long run, this policy is likely to favour only a couple of business groups -- players with deep pockets and staying power which will be able to create their own long-distance networks that bypass those of BSNL/MTNL.

Finally, the way these recommendations have been framed by the GoT-IT, it appears that they will favour neither the basic service operators nor be instrumental in offering any concessions to the cellular operators. All along, the latter have held that li mited mobility is nothing but a full-scale mobile service and represents a back-door entry into cellular services. But their plea has gone unheeded. Whereas through the 5:95 revenue-sharing recommendation the GoT-IT has effectively created a third catego ry of service -- called limited mobility -- with terms different from basic and cellular, but without issuing separate licences for the purpose. All that this policy recommendation favours is a few basic service providers with long-term ambitions to crea te networks that will effectively create an oligopolistic market structure in the long run. If implemented in the current form, this recommendation will have the effect of stifling/restricting competition in the long run.

Instead of these half-hearted measures, the only way to resolve this impasse is for the Government to contemplate issuing a composite licence for both cellular and basic services, with the same terms and conditions governing the two. All this requires is the Government's direction to these players to broadband their licences to permit provision of both cellular and basic services in each other's telecom circles. That is the only way for the Government to end the war of attrition that is being waged by t he basic and cellular service operators and not be caught in the crossfire.