The Telegraph
Since 1st March, 1999
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The Cellular Operators’ Association of India has announced free cell-to-cell incoming calls across all cellular networks, in addition to existing free incoming calls within networks. There might also be lower rates for outgoing calls, including international ones, but those have not been announced yet. This is an understandable response to competition from limited mobility (wireless in local loop), where incoming calls are already free. The move immediately benefits 10.5 million cellphone users, but until the inter-connectivity problem across cell and fixed line networks (who offer limited mobility) is resolved, 10.5 million cellphone users remain insulated from 0.4 million limited mobility users.

The inter-connectivity problem boils down to one of settling access charges. For a while, Mahanagar Telephone Nigam Limited in Delhi cut off cell networks, when they refused to carry limited mobility calls without first settling the issue of access charges. This was after cell operators ignored the notice of the Telecom Regulatory Authority of India, asking them to offer inter-connectivity. For at least two years, cell operators have been fighting the issue of allowing fixed-line networks to offer WILL, and the dispute went to Supreme Court and the telecom dispute settlement appellate tribunal. Thanks to ministerial mediation, this case has now been withdrawn. Consumers should have choice, and in retrospect, the distinction between cell and fixed networks should never have been made. This is a point made by several commentators at that time. But the government, in its wisdom, ignored this and failed to anticipate possible advances in technology.

By the end of the month, TRAI will work out access charges and revenue-sharing arrangements (with retrospective effect) and the issue of level playing fields and a just and fair interconnect regime will surface yet again. Because fixed networks will have to pay access charges for connecting to cellphones (nothing is paid now, although cell-users have to pay for connecting to fixed networks), they have to increase call-charges and the end-result will please neither. Cell-operators will complain that their licence fees are higher than those paid by fixed operators, and the latter will argue that they have social-sector obligations to fulfil. More than Tata Teleservices, the threat of the Reliance juggernaut, has spurred the present round of price cuts, with further reductions by MTNL, Bharat Sanchar Nigam Limited, cell-operators and the Tatas in the offing. Despite imperfect government policy (licence fee versus tariff sharing, and fixed versus cell), telecom reforms are one infrastructure area where reforms have been implemented and consumers have benefited. However, short-term consumer gain must be weighed against a longer-term objective of building the market. With some of the lowest local call charges in the world and an excess of players who are overwhelmingly in the red, the present system is unsustainable. Exits, shakeouts, mergers and consolidation are inevitable. The consumer should indeed celebrate, but part of the celebration is premature. India’s telecom sector is still in a stage of transition.

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