The Telegraph
Since 1st March, 1999
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Phoney war after proxy war Phoney war after proxy war
- Two telecom giants pick up battle as India, Pak make peace

New Delhi, Jan. 21: The rattle of gunfire may have been silenced in Jammu and Kashmir as India and Pakistan wage peace, but a new war is about to break out.

And this will be no proxy war India had accused Pakistan of fighting by sending militants across the border.

Reliance and Bharti have been issued letters of intent by the Department of Telecommunications (DoT) to start mobile phone services in the state, opening another theatre of war between the two private telephony operators.

The two — locked in a grim combat to establish their pre-eminence in the four metropolitan cities and 19 telecom circles in the country — will now start a slugfest to grab a share of the mobile telephone service in the state. They will also be hoping to grab a slice of the over 2 million tourists and pilgrims who come to the state every year.

Both companies are gearing up to launch their services by the year-end.

There is a third player in the fray — the state-owned Bharat Sanchar Nigam Ltd, which launched its cellular service last year and has already cornered 26,000 cellphone customers.

Reliance Infocomm and Bharti Televentures Ltd had applied for a unified access service licence and received the letter of intent last week.

The next step will be to pay the entry fee (Rs 2-3 crore), submit a performance bank guarantee and a financial bank guarantee before the licence is issued. DoT has sent their applications to the Telecom Regulatory Authority of India.

“These will be the first private licences to be issued under unified licensing and the government felt that the regulator should vet it since they had worked on the parameters of the regime. We do not intend to delay the issue of the licence. In normal course, it takes one month from the day of submission of all papers and bank guarantees; it may take another 15 days,” said a senior DoT official, responsible for finalising the licence agreements.

The war between Reliance and Bharti to capture market share will also be one of two different technologies — code division multiple access (CDMA) promoted by Reliance and Global System for Mobile Communications (GSM) which is backed by Bharti.

Currently, there are about 2.75 lakh fixed-phone customers in Jammu and Kashmir and the market for mobile phones is projected at 2 lakh customers. Pre-paid mobile cards, which account for 80 per cent of total mobile users, are likely to be the key to revenue from the region.

“The pilgrims travelling to Vaishnodevi and Amarnath, and tourists to Srinagar and other parts of the Valley will be roaming mobile users or will buy pre-paid cards to be connected. The volumes will be very good for us,” said a senior marketing executive of Bharti.

Executives from both companies are confident there would not be any problem with spectrum allocation — the radio frequency band cellular companies require to offer their services. Since Jammu and Kashmir is a sensitive state, there have been security concerns about offering full-fledged services that could be used by terrorists in the region who are currently lying low after the thaw in India-Pakistan relations.

BSNL offers mobile service in the 900 megahertz spectrum. Three operators can fit into this spectrum and only one, BSNL, is now using it.

Today, relations between India and Pakistan are on the mend. But if there is even a minor change in the peace climate, the government will take over these networks. Sources in DoT said: “A few special clauses may be inserted into the licence conditions in view of the sensitive nature of the border area.”

The licence conditions state that “the authority (government) will have an absolute right to take over the entire services and networks of the licensee with or without revoking, terminating, suspending the licence in the interest of national security or in the event of a national emergency/war”.

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