The Telegraph
Since 1st March, 1999
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Following in the steps of the religious divide, there is now a new line dividing India — GSM, or global system for mobile communication, and WiLL, or wireless in local loop. This divide is not confined to operators alone, but it also touches the lives of ordinary consumers.

Take landline users. The Telecom Regulatory Authority of India recently announced a reduction in the number of free calls and the duration of calls, and an increase in rentals, which means a higher outgo for consumers. On the other side, charges of domestic long-distance calls made within a certain distance have been reduced. Mobile phone users are also not much better off. They may have difficulty connecting to a network or their phones may not work satisfactorily. Then there are other problems like inflated bills, and higher charges than those advertized.

But GSM subscribers will gain once the dust settles down. In just seven years, call charges have come down from Rs 16 a minute to the free-incoming regime today. No wonder the number of cell phone subscribers has increased by leaps and bounds. Against about four crore landlines, there are today one crore mobile subscribers in India. This may be much less than China’s more than 14.5 crore users, but the rate of growth of mobile services in India has been remarkable.

Limited market

Admittedly, this growth has taken place mainly in a few urban pockets. And cell phone companies would have remained content with this market — after all, they had invested Rs 25,000 crore in licence fees with an idea of the depth of this market segment — had it not been for a few factors.

One, the entry of the state-owned Bharat Sanchar Nigam Limited and Mahanagar Telecom Nigam Limited into mobile telephony, which threatened the revenue inflows of cellular operators. Two, the government’s new basic licencing policy has also worked against the interests of mobile services providers. It prevented existing operators from colluding in the fear that it would create an oligopoly. Three, the WiLL threat.

Mobile operators have three arguments in their defence. One, the charges of WiLL phone are not commensurate with the costs they incur. Two, GSM phones would cost the same as WiLL if the interconnection levy and the high license-fee were reduced. Three, GSM commands a market share of 67 per cent the world over against 12 per cent of WiLL, and hence India should not opt for a service that is not globally accepted.

Spilt milk

One cannot fault the GSM lobby on the first argument. But it is for the TRAI to decide on this. Also GSM operators may rest assured because WiLL operators cannot continue for long with an unviable pricing model.

Two, if GSM operators complain about high initial fees, early consumers too can ask why they paid high charges for their connections. The government had offered the cell phone companies relief packages periodically but they never passed them to the consumers. In fact many of them bought out licenses from other operators at prices much higher than what the government had charged. So why blame others for an erroneous business model based on undue euphoria'

Yes, the world uses GSM not WiLL — but so does India. And India will continue to do so provided cellular companies maintain a high standard of services, reduce the charges of domestic long-distance telephony and keep the networks congestion-free. If they do all this, then the only switching over to WiLL will be consumers of BSNL and MTNL fixed phones, fed up with the corrupt linesmen and engineers. Hopefully, WiLL will spread to consumers in remote pockets in Kerala, West Bengal, Bihar, Orissa — where these state-owned companies now have a monopoly.

Whatever media reports may now indicate, once the dust settles down consumers may well find that they have benefited no matter which service they subscribe to.

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