Financial Daily from THE HINDU group of publications
Saturday, Mar 16, 2002
Cell operators to move SC on tribunal ruling
NEW DELHI, March 15
WITH the Telecom Dispute Settlement Appellate Tribunal (TDSAT) allowing fixed service operators to roll out limited mobility WLL services, cellular operators may have lost a battle; but the war is far from over.
According to industry sources, the Cellular Operators Association of India (COAI), the apex body of mobile service providers, is planning to file a special leave petition in the Supreme Court challenging the TDSAT judgment. The SLP is likely to be filed on Monday.
However, the basic private operators are not in the least bit worried. They are confident that the Supreme Court will dismiss the petition challenging the "poor man's mobile". Especially since, as the TDSAT has pointed out in its ruling, the apex court in its earlier rulings had clearly stated that the courts had no jurisdiction over policy matters of the Government.
The sources noted that many private basic operators were waiting for the TDSAT judgment before announcing their plans to roll out WLL services. While Reliance Communications Ltd would be the biggest gainer from this, having already committed close to Rs 25,000 crore over the next five years for the WLL services based on CDMA technology across the country. It has licence to offer basic services in 17 circles, apart from Gujarat where it is already operating. The company has already laid 54,000 km of duct and 30,000 km of optic fibre across its licensed areas.
Tata Teleservcies has already rolled out WLL CDMA services in Andhra Pradesh and plans to roll out in four more circles over the next couple of months. Hughes Tele.com has also announced that it would be rolling out CDMA services in Maharashtra where it operates.
State-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have already rolled out their WLL services in a limited way. BSNL, in particular, plans to aggressively pursue this across the country by the end of the current year.
Meanwhile, the operators are desperately trying to source cheaper CDMA handsets to drive down costs. Negotiations are on between the basic operators and companies such as Hyundai, LG, Motorola and Samsung to introduce basic handsets at a low cost - between Rs 2,000 and Rs 4,000. A year ago, CDMA handsets were available in the market at over Rs 10,000.
The operators are also working out an agreement with US-based Qualcomm Inc, the pioneer of CDMA technology, for supply of cheaper chips used in the manufacture of CDMA handsets. Although Qualcomm officials refused to comment on this, they noted that the TDSAT judgment was a victory not only for CDMA, but also for all emerging technologies.
According to Mr V.P. Chandan, Qualcomm India, "TDSAT has rightfully observed that nothing should be allowed to stand in the way of pursuing the Government's objective of increasing tele-density. It will now make available affordable and quality services to the common man."
Once the handset costs are driven down, it is expected that limited mobility service will automatically become the most affordable and convenient telecom service, especially since even with the existing costs, the limited mobility services work out much cheaper than the GSM-based cellular services. More so because the tariffs for WLL services are the same as fixed line (Rs 1.20 for 3 minutes outgoing and free incoming calls). Low enough to give the cellular operators a run for their money.
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