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Nath Balakrishnan

THE recent spate of changes in the telecom industry has enough to change the smile on the consumer to a broad grin. Being the beneficiaries of the aggressive rate cuts announced by the mobile service operators, calling long distance has become more affordable.

The rate cuts have to be seen in the context of not only increasing competition among the GSM-based players, but also against the backdrop of the advent of the CDMA-based limited mobility service — introduced by such players as Tata Indicom and Reliance Infocomm.

With the CDMA-based service operators rolling out their offerings with the promise of long distance calls at local call rates — provided the call originates and terminates on their network — mobile operators had no choice but reduce tariffs to retain existing customers and prevent a mass migration.

To put things in perspective, the concept of limited mobility is, as such, unique to India. Positioned as it is on the plan of affordability, the objective of such a service is to further the tele-density in the country. Though the intent behind permitting such services is most certainly well meaning, cellular operators have had a bone to pick about the manner in which the CDMA services are being rolled out in the country.

"Roaming" ramifications

The primary contention of the GSM-based mobile operators has been that the CDMA services are encroaching on their space by providing mobility, albeit within a limited area. What really distinguished the GSM operators from their CDMA counterparts was that they were in a position to provide customers with seamless roaming, that is, a customer on a GSM service could travel to different parts of the country as well as abroad and still be available on the same number.

Now, the last bastion of distinction between the GSM and CDMA players is all set to disappear with the latter promising to offer roaming services.

Technically, while customers on limited mobility service will acquire a new number once they roam into a different calling area, calls to their original number would be redirected to the new one.

Needless to say, such a move is bound to have cellular operators miffed. In one stroke, the rendering of roaming services by the CDMA players will nullify the competitive advantage of the GSM players and place the rivalling technology platforms on a level footing.

The move will be a double whammy to the bottomline of cellular operators. If the reduction in long distance tariffs and the waiver of airtime charges on incoming calls were not enough, this salvo fired by the CDMA players is only likely to set their balance-sheets awash in a deeper shade of red.

Cellular operators are justified in seeking to protect their turf.

After all, having coughed up huge licence fees, apart from the charges for allocation of spectrum, the financial stakes are simply too high for them to ignore any competitive move that impinges on what is arguably the most distinguishing feature of their service.

Conversely, the licenses for limited mobility services, which fall under the ambit of basic telephony, were awarded on the basis of a flat entry fee.

TRAI's role

It is here that the regulator TRAI (Telecom Regulatory Authority of India) should step in and resolve the issue with a greater degree of firmness. It has been seen, time and again, that service operators, irrespective of type of technology platform they embrace, have approached either the TDSAT (Telecom Dispute Settlement Appellate Tribunal) — a body with adjudicatory powers — or the Supreme Court to seek resolution of contentious issues, superseding the regulator in the process. All the more reason why TRAI should be vested with greater powers. What is more important is that a level playing field should be established, so that competition amongst the various players is both free and fair.

If limited mobility does become a full-fledged substitute for cellular services, which it will, and should roaming be permitted, it is only appropriate that providers of limited mobility be asked to pay the same licence fees and spectrum charges as their cellular counterparts did to rectify the imbalance.

That would, once and for all, scotch the speculation that licences for limited mobility services were but a proxy to gain a toehold in the exploding market for mobile telephony, apart from fostering a spirit of healthy competition.

Accessibility and affordability do constitute two important legs of the tripod on which the service of telephony rests.

It is the third leg, which is to ensure that competitiveness of the service operators is preserved and not skewed in favour of any particular operator/technology that will provide balance to the industry even as it rings in revolutionary changes.

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