The Telegraph
Since 1st March, 1999
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Level-playing field has become a defining concept in India after the inauguration of the era of liberalization. Levelling of the field, it is argued, makes competition fair and genuine. It has been the project of the Telecom Regulatory Authority of India to create the grounds of fair competition between cellphone operators and WiLL-mobile operators. The new policy of TRAI regarding interconnect user charges, it was expected, would work towards this. This may not have happened. Cellphone operators and WiLL-mobile phone operators will now be paying the same termination charges. But TRAI has fixed differential pulse-rates for calls from fixed lines to cell phones and WiLL-mobile phones. It will now be cheaper to call a WiLL-mobile phone from a fixed line than a cellphone. This cannot be taken as a levelling of the field. There is thus a bias in favour of the WiLL-mobile phone operators embedded within the policy. The victim of the policy is, of course, Bharat Sanchar Nigam Limited. The latter will now be able to charge higher monthly rentals but this will be offset by its losses in the realm of interconnect charges. Since fixed-line callers that is, subscribers of BSNL will pay less to call a WiLL-mobile phone than a cellular phone, there is an element of distortion in the market. It could be argued that by this, TRAI is actually making BSNL subsidize WiLL-mobile phones. This is a bit amazing since doing away with subsidies in any form is one of the overall aims of the reforms programme.

The hardest hit by the policy will be the land-line business. The TRAI has allowed WiLL-mobile firms to fix their own tariff as they wish. This is a clear deviation from the previous norm by which WiLL airtime rates could not be lower than those of fixed lines. The cellular phone industry also has no reasons to be specially happy with the new policy. Incoming calls will be free and cellular firms will be paid an access charge of 40 paise per minute. This creates the possibility of cellular firms trying to make up their losses by increasing the charges of outgoing calls. Distortions of other kinds remain untouched by the TRAI. Cellphone operators pay an average of Rs 3,000 crore for an all-India licence whereas WiLL-mobile operators pay Rs 495 crore. The difference is stark, and the matter, not unexpectedly, has gone to the telecom dispute settlement appellate tribunal. It is not unreasonable to anticipate that both BSNL and the cellular firms will also appeal to the TDSAT to look into the special favour being shown to WiLL-mobile firms by the TRAI. The level-playing field is still a distant horizon.

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