Legally unified

Rahul Gupta

MUMBAI: Is it an end of license raj or emergence of WLL raj? At last the government has given green signal to the Unified License regime with the view that it would create a level playing field among all the telecom service providers in the country. But will it actually happen?

The government that needed time to finalize the modalities to restrict WLL players to single SDCA took no time in giving green signal to TRAI’s recommendations on unified licensing. The present form of unified license has infact created more chaos rather than resolving the issues. The government has done nothing but just legalized all the allegedly illegal services being offered by Reliance.

The proposed regime permits unified license for only three telecom services- Basic, WLL and cellular, while the convergence bill recommended all the services- NLD, ILD, etc. under one license regime. While the government says that it needs six more months to include all this in the unified license regime, no reason has been given for this.

The government has cleared all the recommendations of TRAI on the unified licensing regime without any changes paving the way for WLL players to provide full mobility. Also now any operator can go for any of the three services by just paying the unified license fee. The cabinet also allowed intra-circle mergers of telecom operating companies with a condition that number of service providers would not fall below three in any circle.

Rahul Gupta

MUMBAI: Is it an end of license raj or emergence of WLL raj? At last the government has given green signal to the Unified License regime with the view that it would create a level playing field among all the telecom service providers in the country. But will it actually happen?

The government that needed time to finalize the modalities to restrict WLL players to single SDCA took no time in giving green signal to TRAI’s recommendations on unified licensing. The present form of unified license has infact created more chaos rather than resolving the issues. The government has done nothing but just legalized all the allegedly illegal services being offered by Reliance.

The proposed regime permits unified license for only three telecom services- Basic, WLL and cellular, while the convergence bill recommended all the services- NLD, ILD, etc. under one license regime. While the government says that it needs six more months to include all this in the unified license regime, no reason has been given for this.

The government has cleared all the recommendations of TRAI on the unified licensing regime without any changes paving the way for WLL players to provide full mobility. Also now any operator can go for any of the three services by just paying the unified license fee. The cabinet also allowed intra-circle mergers of telecom operating companies with a condition that number of service providers would not fall below three in any circle.

On the other hand, basic operators feel that they don’t get to make much money because of their contractual obligations like rural telephony. In other words, they would continue to be constrained to serve non-lucrative circles. But if these players migrate to unified licensing they will have doors open for cellular service as well as WLL, but that needs a huge amount of investment. But, since all the basic operators- BSNL, MTNL, Bharti, Tata is monetarily well off because of obvious reasons, investment won’t be an issue and unified licensing will only give a much-needed boost to their services.

Unified licensing has caused enough panic among beleaguered cellular operators. They are the only one who is going to face the heat of the new regime. The bone of contention between cellular operators and basic and WLL players is regarding the issue of value added services provided by WLL and basic service operators. Cellular operators have been demanding that WLL service by basic service operators and roaming and multiple registrations by WLL are illegal. After a yearlong battle with TDSAT and the government, the aggrieved cellco’s eventually got the decision in their favor when last month when the government decided to restrict WLL players to single SDCA.

Cellular operators concerns are justifiable. The substantially lower call rates and infrastructure costs for WLL players, their entry as full mobile service providers will drive cellular losses higher and force some smaller cellular operators either out of business or drive them to form mergers. Analysts estimate that cellular operators have already invested around $ five billion and lost almost $ two billion. Analysts believe that cellular companies should be paid compensation to sustain themselves in the cellular business. COAI recently asked for $four billion compensation in lieu of unified license but, TRAI refused by saying that cellular operators have already been given sops over Rs 30,000 crore. However, the total investment by WLL players is only Rs 20,000 crore and fortunately for them, if required they have enough funds available.

The battle between WLL and GSM operators run deep, and are driven by national politics and corporate marketing rather than true technology issues. It is unfortunate that the impasse between cellular and WLL service providers has dragged the industry players into prolonged litigation affecting investment in this sector.

If the government is really serious about the issues involved and wants to sort it out, it will have to restructure the unified license and follow the clauses of the proposed convergence bill. The bill proposes one regulator for all the telecom services and that all the telecom services should be under one license, provided that all the operators benefit from it.

The present structure of the unified license favors only a certain corporate giant. No doubt, WLL players are upbeat and cellular players feel dejected by the announcement of unified license regime. The government should take concrete steps and ensure that telecom sector should not become a cesspool of allegations and counter allegations between the government and two factions of service providers. No doubt, if implemented appropriately, the new regime will pave the way for technology to take over in this domain. But, that needs some corrective measures in the unified license structure.

(CNS)

Let’s see what actually operators get out of the license regime. The unified license has eventually legitimized the illegality of Reliance. Reliance and other WLL players can now provide full mobility by just paying the migration fees to unified license. Reliance is the only player that is going to get most of it. Reliance currently has around four million customers, reason- full mobility on it’s network, which government says is illegal and has recently posed a penalty of Rs 485 crore and issued a notice to halt roaming immediately. Now to sustain its mobile business and to retain the customer base, it is imperative for Reliance to migrate to a new regime by paying just Rs 1,581 crore including a penalty amount of Rs 485 crore. Last month, government had decided to restrict WLL players to single SDCA and since then Reliance had been desperately waiting for the government’s decision on unified licensing. The company has whole-heartedly welcomed the government move on unified licensing.

On the other hand, basic operators feel that they don’t get to make much money because of their contractual obligations like rural telephony. In other words, they would continue to be constrained to serve non-lucrative circles. But if these players migrate to unified licensing they will have doors open for cellular service as well as WLL, but that needs a huge amount of investment. But, since all the basic operators- BSNL, MTNL, Bharti, Tata is monetarily well off because of obvious reasons, investment won’t be an issue and unified licensing will only give a much-needed boost to their services.

Unified licensing has caused enough panic among beleaguered cellular operators. They are the only one who is going to face the heat of the new regime. The bone of contention between cellular operators and basic and WLL players is regarding the issue of value added services provided by WLL and basic service operators. Cellular operators have been demanding that WLL service by basic service operators and roaming and multiple registrations by WLL are illegal. After a yearlong battle with TDSAT and the government, the aggrieved cellco’s eventually got the decision in their favor when last month when the government decided to restrict WLL players to single SDCA.

Cellular operators concerns are justifiable. The substantially lower call rates and infrastructure costs for WLL players, their entry as full mobile service providers will drive cellular losses higher and force some smaller cellular operators either out of business or drive them to form mergers. Analysts estimate that cellular operators have already invested around $ five billion and lost almost $ two billion. Analysts believe that cellular companies should be paid compensation to sustain themselves in the cellular business. COAI recently asked for $four billion compensation in lieu of unified license but, TRAI refused by saying that cellular operators have already been given sops over Rs 30,000 crore. However, the total investment by WLL players is only Rs 20,000 crore and fortunately for them, if required they have enough funds available.

The battle between WLL and GSM operators run deep, and are driven by national politics and corporate marketing rather than true technology issues. It is unfortunate that the impasse between cellular and WLL service providers has dragged the industry players into prolonged litigation affecting investment in this sector.

If the government is really serious about the issues involved and wants to sort it out, it will have to restructure the unified license and follow the clauses of the proposed convergence bill. The bill proposes one regulator for all the telecom services and that all the telecom services should be under one license, provided that all the operators benefit from it.

The present structure of the unified license favors only a certain corporate giant. No doubt, WLL players are upbeat and cellular players feel dejected by the announcement of unified license regime. The government should take concrete steps and ensure that telecom sector should not become a cesspool of allegations and counter allegations between the government and two factions of service providers. No doubt, if implemented appropriately, the new regime will pave the way for technology to take over in this domain. But, that needs some corrective measures in the unified license structure.

(CNS)