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COVER STORY: GOVERNMENT
PMO Prevails Upon TRAI On Limited Mobility
The process began
in the PMO on October 11 last year. On that day, N.K. Singh, then secretary
to the prime minister, convened a meeting in his South Block office. It
was attended by the economic affairs secretary, the expenditure secretary,
the commerce secretary, the telecom secretary, the secretary DIPP and
Planning Commission member Montek Singh Ahluwalia, who headed a sub-group
on telecommunications. In protocol terms, Ahluwalia's presence in a meeting
presided over by Singh was an aberration. The former finance secretary
enjoyed the rank of a minister of state while Singh was a secretary.
In discussing the demand by basic- telecom operators
to avail of localised WiLL services as envisaged in the NTP, the group
decided to refer the fixing of a licence fee and revenue-sharing arrangements
to TRAI. However, very cleverly, it also asked TRAI to determine "whether
such mobility should be allowed in a limited form within the short distance
charging area (SDCA) or full mobility should be allowed for the entire
service area".
The difference between the options was enormous.
In theory, limited mobility would facilitate the expansion of telephone
services into congested and slightly inaccessible areas, whereas full
mobility would, in effect, erase the distinction between the land line
and the mobile phone (see box). On its part, Singh's meeting was unambiguous
in stating its preference: "There was a general conclusion that since
WiLL technology will encourage a faster roll out, no restrictions should
be imposed on the use of such technology, particularly since it will benefit
the subscribers in getting access at competitive rates." In short,
TRAI was left in no doubt about the PMO's preference in the matter.
The point was further driven home at a 15-member
meeting of the Strategic Management Group in the PMO on November 6, 2000,
chaired by Principal Secretary to the Prime Minister Brajesh Mishra. The
group decided in favour of "endorsing the consensus reached on the
issue at the meeting held on October 11, 2000 for giving encouragement
to WiLL technology for faster roll out". It further decided to record
its request to TRAI "to expedite finalisation of their recommendations
so that DoT may take a decision in the matter by December 2000".
Four months later, both Mishra and Singh would
pretend that the PMO had nothing to do with these telecom changes and
that these meetings did not happen.
TRAI, on whose recommendations the limited mobility
is supposedly being introduced, was actually never asked to deliberate
on whether or not limited mobility should be introduced. In its letter
to TRAI on October 9 last year, DoT sought its suggestions only on the
distance up to which limited mobility should be allowed and the entry
fee and spectrum charges that fixed-telephone companies should pay for
starting limited mobility. The moot question of whether or not limited
mobility was in line with the Government's contractual obligations was
left out of TRAI's terms of reference.
Predictably, TRAI recommended introduction of
limited mobility on January 8, 2001. It removed the cap on the number
of fixed-phone services providers in each circle and recommended that
spectrum was to be allocated on a first-come-first-served basis. On January
27, Paswan and Telecom Secretary Shyamal Ghosh announced the new policy.
The day was carefully chosen; it was a Saturday and a government holiday.
Thus cellular operators were prevented from challenging the modified policy
in court. Interestingly, just three days before TRAI made its recommendation
for WiLL, on January 5, the DoT also invited bids for a fourth cellular-service
provider in each circle.
The new policy has triggered a war among telecom
operators. Cellular services companies claim the licensing agreement signed
by the fixed-phone companies clearly specified that they would not provide
mobile-phone services. Even the NTP 1999 was silent on the issue, though
it did stress convergence between different telecom services to pass on
the advantage of newer technologies to the consumer at the most competitive
rates.
The parliamentary standing committee that examined
the feasibility of limited mobility also cautioned against introducing
it without creating a level playing field for cellular companies. In its
report tabled in Parliament on March 8 this year, the committee said,
"It is not understandable how, without a mobile licence, fixed-phone
companies will be able to offer mobility, even if a limited one. No doubt
consumer interest should have all the priorities, but no section of the
operators should be provided special facilities at the expense of the
other."
Cellular companies claim this is exactly what
limited mobility will do. It will hamper the phenomenal growth in the
number of cellular subscribers witnessed in recent years (32 lakh now
as compared to less than 10 lakh in 1998), which had been accompanied
by a gradual reduction in the cost of cellular-phone services. Besides,
due to regulatory and legal hurdles, cellular companies have been barred
from offering free incoming calls. Once incoming calls are free, cellular
phones will become more affordable.
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