The Telegraph
Since 1st March, 1999
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Twists & turns in telecom travails
- Ambani, Mittal distance themselves from working group; govt mulls options

New Delhi, Feb. 19: Reliance’s Mukesh Ambani and Bharti’s Sunil Mittal — the two protagonists in the battle between limited mobility players and cellular operators — have decided not to be actively involved in the peace drive initiated by communications minister Arun Shourie.

Sources in the communications ministry said the two titans of the telecom industry have requested the minister to excuse them from personally attending the meetings of the working group that has been set up by Shourie to build a consensus on the contentious issue.

This marks a sudden volte-face by the two telecom industry leaders since they had agreed to participate in the deliberations of the working group.

The working group has just completed preliminary discussions on the possible ways to amicably resolve the issue of allowing limited mobility players to offer their services using wireless in local loop (WiLL) technology.

The initiative — which is designed to resolve all the issues that have sparked a rash of cases that are now pending before the courts and the Telecom Dispute Settlement and Appellate Tribunal (TDSAT) — hasn't found much support from the telecom industry as yet.

This has put the onus on the government to toss a variety of options in order to arrive at a consensus on the vexed issue.

The government has re-started an internal exercise to explore a variety of options to resolve the conflict.

“We had been working on the various options, even before the working group was set up. Even now, it is not clear how long these cases that are pending in courts and before the TDSAT will drag on. We will also be ready with our draft in case a resolution is not reached by the working group,” said a senior official in the communications ministry, closely associated with the working group.

The first option being explored is to offer the basic/limited mobility service providers a cellular licence as the fifth or sixth operator in a telecom circle. This will force limited mobility players like Reliance Infocomm and Tata Teleservies to stump up the same fee as was paid by cellular operators during the fourth round of bidding. At present, the number of cellular operators per circle is capped at four though former communications minister Pramod Mahajan had often talked of removing the restriction on the number of players.

In July 2001, the government received financial bids worth Rs 2,229.93 crore for the 17 cellular circles in which licences were on offer to the fourth cellular operator. That could serve as a benchmark to work out how much more the basic operators will have to pay.

Reliance, for instance, has paid Rs 450 crore for basic licences in 17 circles and another Rs 400 crore for cellular licences in Calcutta, North East, Assam, West Bengal, Bihar, Himachal Pradesh, Orissa and Madhya Pradesh. Reliance has the licence for the Calcutta cellular circle but has never started operations there.

The second option is to offer a convergence licence to both cellular and basic operators and allow both to offer the full range of services.

The third option, which has been suggested by an internal committee, is to refund the licence fee to the cellular operators. The plan is to also hand back the various other fees that both basic and cellular operators feel deter them from reaching the remote parts of the country or offering services at low rates.

The fourth option is to offer a licence fee holiday for a five-year period to the basic, fifth, and sixth cellular operators with a convergence licence.

“The solution to break the impasse should not lead to a loss of revenue for the government. To ensure this a bank guarantee equal to the profits earned by both the operators and performance bank guarantee based on the profits expected to be generated over the next five years may be deposited by them,” said sources in the communications ministry.

The fifth option is to ask the courts and TDSAT to give speedy judgements on the cases pending before them by hearing the litigants on a daily basis.

The last option is to set up a permanent group of ministers (GoM) supported by a cross section of professionals from the telecom industry and the government or authorise a consultant to examine the issues threadbare and get an approval from all concerned that they would not seek any legal remedy once the proposal is accepted by all.

A senior official in the communications ministry said, “Each of the options is open to a fresh round of litigation. We are aware of this problem.”

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