Indian fixed-line firms' mobile service may be costly

NEW DELHI: India's cellular phone operators' lobby said on Sunday a planned

"poor man's cellular phone" service permitted for fixed-line firms

would be unaffordable for the masses.

The Cellular Operators Association of India (COAI) said the monthly rentals

set by the telecom regulator for fixed-line firms offering limited mobile

service and higher handset costs would keep the service out of reach of most

poor people. "The monthly rentals of Rs 450 rupees to Rs 630, per month

have completely belied the general public's expectations of a vastly more

afforable service," the COAI said in a statement.

The statement said the regulator's order on the monthly rentals for the

fixed-line firms' mobile service provided "a stunning confirmation" of

COAI's repeated submission that the CDMA wireless in local loop technology was

neither cheaper nor new.

The government earlier this year permitted fixed-line firms to offer a

limited radius mobile service to customers using the WLL technology, drawing

protests from the cellular industry which accused it of allowing backdoor

competition into their business.

The government has capped tariffs from a WLL mobile phone at Re 1.20 for a

three minute call, about a sixth of that charged by cellular operators and is

counting on it to boost India's telephone penetration. India now has around 3.5

phones, per hundred people and the government plans to increase that to seven by

2005, and 15 by 2010.

But the cellular industry calls the government decision unfair, saying that

they have paid huge amounts set by competitive auctions as entry fees to the

government unlike fixed-line firms who only have to pay a fixed fee. Cellular

firms are also worried that the cheaper service could lead to their customers

jumping ship.

"It is farcical to expect that such an expensive service will play any

significant role whatsoever in increasing tele-density especially among the less

affluent or semi-urban or rural population," COAI director general T V

Ramachandran said in the statement.

(C) Reuters Limited 2001.