Financial Daily from THE HINDU group of publications
Friday, May 24, 2002
TRAI may delay tariff order for WLL services
NEW DELHI, May 23
MUCH to the disappointment of basic service operators, the Telecom Regulatory Authority of India (TRAI) is likely to delay its revised tariff orders for wireless in local loop (WLL) limited mobility services.
According to informed sources, the authority was originally scheduled to come out with a revised tariff order in the last week of this month. However, there is as yet no consensus among the TRAI members on whether to abolish the floor rate of rentals and to allow the operators to offer alternative tariff structures.
As per the present tariff structure, the authority has mandated that the basic operators offering these services have to charge a monthly rental of between Rs 450 and Rs 550 per month. Although the outgoing call charges as such have been pegged at Rs 1.20 for every three minutes with incoming calls free, the high rentals have been a big deterrent for anyone wishing to go in for these services.
The authority has been undertaking a detailed cost based study of these operations to revise the tariff structure. Although the Department of Telecommunications (DoT) and the basic operators both public and private have been putting pressure on the authority to do away with the floor rate, some members of the authority feel that while a downward revision is possible, a total abolition would be unfair to the cellular operators.
They have argued that any such move would only blur the distinction between cellular mobile services and WLL services.
The cellular operators too have been opposing any move to abolish the floor rate stating that the WLL operators will encroach upon the markets available to the cellular mobile service operators if some regulatory levelling of the playing field between limited mobility and cellular mobile service is not done.
They are insisting that a distinction between the two services must be clearly maintained and the WLL services should not be used by the basic operators to offer undue and unequal competition to them. The DoT and basic operators have, however, been arguing that since WLL is a basic service, there should be no distinction between the terms offered for wireline and wireless operations.
They have noted that the cellular mobile operators have been aggressively marketing the pre-paid card segment, which allows anyone to remain connected at a minimum cost of Rs 300 per month. For WLL services, the minimum costs per month for the subscriber at present works out to Rs 450 plus call charges.
DoT, in particular, has noted that this cost difference would defeat the very purpose of allowing basic operators to deploy these services for increasing tele-density. It had, therefore, sought that the lower ceiling be abolished and the operators given more flexibility.
The authority, which has been working on revised cost-based estimates is, however, divided on this issue. A decision was yet to be taken whether to come out with a revised tariff structure now, or to club it the final Tariff Order 2002 for all telecom services basic, cellular and long distance which is due in the next couple of months, the sources noted.
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