Shadow-boxing

THE RECOMMENDATIONS OF the Group on Telecom and IT on the festering Wireless in Local Loop (WiLL) technology controversy have not pleased either the basic service operators (BSOs) or the cellular mobile service operators (CMSOs). The dispute is now sure to be pursued at the Telecom Disputes Settlement and Appellate Tribunal and thereafter in the civil courts. In the process valuable time will be lost in the drive to expand the telecom network. But that is not surprising since the controversy is less about what technology can be used where and more about the tussle for future dominance in the burgeoning telecom and IT business.

The core complaint of the CMSOs is that the rules of the game were changed to allow the BSOs to enter their business and provide mobile services with WiLL technology. In the first place, the BSOs will not directly compete with the cellular service providers since the value-added services - which the CMSOs themselves claim give them the most revenue - will be outside the domain of the basic service providers. Moreover, in a sector like telecom where the technology changes so quickly, the economy and the consumer would be the loser if the policy-maker and the regulator were to be bound permanently to old rules. The Telecom Regulatory Authority of India (TRAI) in any case tried to ensure a level field by confining the BSOs to limited mobility and by lowering the revenue-sharing fees to be paid by the CMSOs. After all, the CMSOs did in the past themselves benefit from a change in rules - the shift from a licence fee arrangement to revenue- sharing which lowered their cost of spectrum - so they cannot now complain on this count. The Group on Telecom and IT has, while confirming the TRAI recommendations, gone a step further and equalised the inter- connection charges of the cellular and basic service providers, which will leave the BSOs with much less of a surplus for use as a cross-subsidy. But as this will make the cost of WiLL mobile services much more expensive than the Rs. 1.20 a minute that the BSOs had hoped to charge, they are naturally as unhappy as the cellular service companies which wanted nothing less than a complete reversal of the WiLL rules.

Companies presently providing basic services are also in the cellular business and 14 of the 18 companies which are now CMSOs have applied as well for new basic service licences. In addition to this criss-crossing of interests there is a strong likelihood of the proposed Convergence Bill introducing a single licence, which in fact was suggested by the 1999 National Telecom Policy in order to keep up with developments in technology. There should therefore be really no controversy about WiLL. All this points to shadow-boxing with other factors at play in the wrangle. The ongoing deregulation in telecom, the impending privatisation of the two public sector telecom giants, the changes in technology and the creation of newer and newer businesses in the area mean that the companies that are first off the block are likely to acquire positions of market dominance in voice, data and multimedia traffic. Those with more resources and enterprise are already building broadband networks and have major plans to straddle the telecom, IT and entertainment sectors. In this unfolding scenario those who can enter yet another business - basic services that are a potentially lucrative business because of the limited mobility service - will be taking another step towards market dominance. This is a special cause for worry in telecom because so much of the shape of future activity is still unknown. It is a cause for concern not just for the many players in the telecom sector but also for the consumers. But dominance cannot be prevented in the manner that the CMSOs have tried to do in the use of WiLL by basic service providers. It is the regulatory authorities and consumer associations who have to wake up to the impending threat.

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