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.