rediff.com: SC refuses stay on WLL; final hearing on July 19

In a setback to cellular operators in the legal battle over limited mobility, the Supreme Court on Monday refused to stay the Centre's decision allowing basic service providers to offer limited mobility services.

The limited mobility service, based on wireless in local loop technology, offers mobility at a tariff of Rs 1.20 for a three-minute outgoing call and free incoming calls.

A Bench comprising Justice R P Sethi and Justice K G Balakrishnan, issued notices to the Union of India and basic operators on a petition filed by Cellular Operators Association of India challenging the decision.

The Supreme Court set July 19 as the date for a final hearing to decide on a petition filed by the mobile phone industry seeking to scrap a government policy allowing basic operators to offer limited mobile service.

Limited mobility services has been a bone of contention between basic and cellular operators for over a year, with the latter moving the apex court after TDSAT, the telecom tribunal, in March last upheld government's decision allowing the basic operators to offer limited mobility services.

The controversial policy is at the heart of a dispute which has competing technologies vying for a large chunk of the country's nascent telecom sector billed as one of the world's fastest-growing markets.

The government last year allowed fixed-line firms to offer Code Division Multiple Access-based 'limited-mobility' services using wireless in local loop technology for cheaper rates than those charged by mobile firms using Global System for Mobile Communications technology.

Cellular companies had objected to the move, saying the policy allowed backdoor entry to fixed-line service operators who would target the same set of customers.

In their petition filed before the Supreme Court, the cellular operators sought setting aside of the impugned order of March 15 of TDSAT.

The petition also sought setting aside and quashing of decision of government (Department of Telecom) dated January 25, 2001 by which fixed service providers were permitted to provide limited mobility services.

The apex court also issued on Tuesday notices to the government and fixed-line telephone companies to file their response to the mobile industry's plea.

The Cellular Operators Association of India had approached the court after the sector's regulatory body and an appellate tribunal dismissed its plea, saying it found nothing wrong with the government policy aimed at boosting phone penetration.

Celluar operators in their petition said that the consumers will have to pay between Rs 6,000 to Rs 10,000 to buy a handset (for WLL) or make a deposit of Rs 10,000 with a rental of Rs 80 per month for the handset.

"The monthly rental is minimum Rs 450-550. The difference in tariff between the existing fixed line service and WLL mobility is huge. Additionally, under the service there are no free calls, making it virtually impossible for target fixed line consumers, namely the rural and low income subscribers, to afford WLL mobility," it said.

The TDSAT, in its March 15, 2002, order had given the go head to the basic telecom operators to provide mobile telephone service at a cheaper rate of Rs 1.20 for three minutes outgoing call and free incoming calls.

"Taking an overall view of the case, we are of the view that increasing tele-density of the country is an object which must be pursued with zeal and vigour. Nothing should be allowed to stand in the way of pursuing this objective," the tribunal said in its order.

Referring to a point raised by the COAI that allowing basic operators to offer WLL may impact the cellular industry, TDSAT had in its order stated: "There may be erosion of the profits of the petitioners, the cellular operators. But the petitioners have already been compensated in various ways."

Stating that the erosion of profits may also take place by entry of the fourth cellular operators, TDSAT chaired by Justice S C Sen observed: "As the National Telecom Policy 1999 stands, there may be even more operators in the field."

"Moreover, there cannot be any legitimate expectation that no new technology will evolve and if any new technology arrives, that will not be allowed to be adopted by any of the petitioners' competitors," TDSAT had said, adding, "taking into consideration all these facts we are of the view that this petition must fail and is dismissed."

With a population of more than one billion people, India has a little over four phones per 100 citizens as against a global average of 15. The government hoped its policy would attract more players to the investment-hungry sector.

India's $5.0-billion mobile phone sector -- expected to grow by a compounded 52.5 per cent through 2005 -- has drawn massive investment from private equity players and global telecom giants battling saturated demand in most western markets.

There are over six million mobile phone users in India compared with nearly 150 million subscribers in neighbouring China, the only other country with more than a billion people.



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