Friday, April 1, 2011

Telecom Tangle

 The telecom scenario has precipitated a shameful situation characterized by an inefficient regulatory mechanism, dubious political interferences and immature policy decisions, which culminated in the exit of its high profile Minister. Everyday we get to hear about a new fight between the Telecom Regulatory Authority (TRAI) and the main players – either on a new tariff plan, a service provision or a violation of the accepted norms. What forms the basis of all these is the lack of a sensible telecom strategy or policy.
Telecommunications to put it mildly, plays a pivotal role in the development of the country. At the same time in the context of the new market practices governed by liberalization and  globalization, it isa business opportunity apart from a social need and national priority. It is here that the role of the government as regulator comes in. As a regulator, the question is whether to intervene in the market to act as a catalyst or to underline the social necessity and the national priority in a vital area like telecommunications. As far as market is concerned, a mature market is itself a regulator, thus the government becomes only a facilitator to achieve it. On the other hand the government, is the watchdog of the rights of the common man, and has to see it that the fruits of technology drip down to the grass roots. But the present scenario shows that the government has failed in all the above terms. As a facilitator, it has failed to define the technological parameters, leading to a murky row between CDMA and GSM services, and as a regulator, it has equally failed to create a level playing field for similar services.
The TRAI has not been able to clarify whether the CDMA and GSM services are cellular services, instead it has put the CDMA in the ‘wireless in local loop’(WiLL) category, and the stands confused when the principal CDMA player Reliance announced ‘roaming services’ across the country. If the mobility attached to the new wireless technology mooted by Reliance and Tata goes beyong 10km, and if the transmission is going to be at 2GHz and above, it is purely cellular albeit in WiLL’s apparel. For, this is similar to the multi-channel multi-point distribution service (MMDS) and the local multi-point distribution services (LMDS) now being deployed in many Western countries. In the US they operate in 2 GHz and 28 GHz frequency bands for covering distances over 50 km and 5 km respectively, from a central transmission point. In many European countries and also in the US, MMDS, and LMDS spectrum are provided only after bidding process.
Here, a avery interesting question asked is why are regulatory bodies prescribing different standards for different categories, if all these services work on a common platform of convergence? If convergence and information technology is meant to bring voice, data and image on a common platform, why restrict these to a particular category. The WiLL providers are not allowed to give ‘plus services and roaming’, while they are exempted from the spectrum fee and biding for the same. Similarly cellular operators have to go through competitive bidding and pay the ‘spectrum’ fee with low returns as interconnection charges from WiLL and fixed line provides.
Recently, Reliance made a counter move to scuttle the interconnection agreements by mooting a “Zero Access Charge” initiative based on bill-and –keep formula in which there is no settlement of access charges between two operators (cellular, fixed-line or WiLL mobile in any combination) at the month end. Such two network generate the same traffic at the volumes ensuring uniform utilization thus dispensing the need for any access charges settlement. This will definitely create a fresh row between the cellular and mobile service providers and the WiLL operators, as the huge traffic imbalances between the WiLL mobile and cellular networks will result in huge loss of access revenue for the cellular industry. How will the TRAI overcome this move?
A recent report says that Reliance Infocom has logged in 2.2 million subscribers for its limited mobility services in just one month since bookings commenced across the country, even as mobile subscriptions fell drastically in the month of January. If the trend continues at the present rate, the company could well manage to lap up five million customers by the end of this fiscal, as against the estimated 11.16 million cellular subscribers in the country, which would give them a good bargaining power. Similarly alarm bells are ringing at BSNL, which is facing a strange predicament. According to official sources, around 25 lakh telephones have been surrendered over the past one year, and the total number of new connections provided by BSNL has gone down by around 20 percent this year.
These are some of the bitter realities that competition has ushered in the telecommunications arena. Thus these giants leaps in service and technology have to be complemented with similar leaps in policy abd regulation making. To sort out these complexities, stability, consistency, fairness and maintenance of a level playing field are necessary. But that is what the government lacks.
The proof: the Convergence Bill is still gathering dust.

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