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Cell firms likely to cut ISD tariff by 50%

By BS Economy Bureau in New Delhi
January 21, 2003 12:42 IST

The month-long spat between cell firms and basic operators came to an end on Monday with Communication and Information Technology Minister Pramod Mahajan promising to look into the cell firms' demand for a level playing field.

While Mahajan prevailed upon the cell operators to interconnect immediately with limited mobility operators, the cell operators on their part said a slew of tariff cuts was now being planned.

Mahajan also promised that the access charges would be determined by the telecom regulator with retrospective effect.

Cell subscribers can expect a 50 per cent cut in peak international long-distance tariffs to Rs 11.99 a minute from Rs 24, free incoming calls and special home zone tariffs with reduced airtime charges. All these are expected in the next 48 hours.

On the other hand, Tata Teleservices will revise downwards its limited mobile service tariffs from Tuesday.

The Telecom Regulatory Authority of India will also announce the interconnection usage charges this week along with the revenue-share arrangement between the cell operators and limited mobility operators to be applicable with retrospective effect.

At present, cell firms pay Rs 1.20 per three minutes as access charge to limited mobility players with no reciprocity. Mahajan has promised to re-look the issues of a level playing field as demanded by cell firms.

Cell firms have also decided to withdraw their appeal with the Telecom Dispute Settlement Appellate Tribunal against Trai's January 9 order, which asked them to interconnect with limited mobility operators immediately.

After a two-hour meeting with cellular operators, including Sunil Mittal, chairman, Bharti Group; Rajeev Chandrashekhar, chariman, BPL Cellular; Virat Bhatia, managing director, AT&T; Dilip Modi, chief executive officer, Spice Telecom; Asim Ghosh, managing director, Hutchison; and Rajan Swarup, chief executive officer, Escotel; Mahajan said: "To promote affordable cellular services, I have promised to look into their issues for a level-playing field on an urgent basis. Trai will come up with regulations for a just and fair interconnect regime.

"The cellular industry has promised that it will allow the termination of calls of basic operators, including limited mobile, with immediate effect."

This is not the first time Mahajan has brokered a deal between warring sides. He had intervened in the interconnection fight between Bharti Telesonic and Bharat Sanchar Nigam Ltd and again between BSNL and Videsh Sanchar Nigam Ltd.

The minister said while the concerns relating to interconnection charges would be resolved by Trai, the cell operators' argument on entry fee was "illogical".

Sunil Mittal said: "We have agreed to interconnect with wireless in local loop  operators only because we have got assurances from the government that our concerns will be addresses. We have also got assurances that the pending interconnection terms, when finalised and accepted, would be the basis of charging for all calls from WLL operators from today."

However, the ceasefire between cell firms and limited mobile operators may not hold for long. If Trai prescribes a higher termination charge, it could be challenged by basic operators because they would have to increase call rates.

Sources said Trai was working on a 40 paise termination charge, which would mean that an operator like Reliance would have to increase its call charges from 40 paise a minute to 80 paise a minute.

Mahajan also defended Mahanagar Telephone Nigam Ltd's action to disconnect cellular operators in Delhi.

"I was aware of the MTNL move and am not opposed to it. If 20 lakh subscribers have to suffer for a day for the improvement of the telecom sector then so be it," Mahajan said.

MTNL had disconnected cell firms in Delhi after they refused to carry calls from limited mobile users without settling the access charges.

Tribunal puts off hearing, Trai needs time

The Telecom Dispute Settlement Appellate Tribunal on Monday deferred hearing on the issue of limited mobility to basic operators to February 24 even as the Telecom Regulatory Authority of India extended by a couple of days its hearings on the punitive measures to be imposed on cell firms for defying its January 9 order to interconnect.

Trai had issued a notice to the cellular firms on Thursday, giving them 72 hours to explain their defiance.

The tribunal said the hearings would be held till February 28. The Supreme Court had asked the tribunal to review its earlier order, which had given the go-ahead to the limited mobility operators.

The tribunal also took up the application filed by the cellular operators against Trai's January 9 order, which asked them to offer interconnection to the WLL operators.

The tribunal adjourned the hearing till tomorrow following an appeal by the cellular firms that they needed more time. Private basic operators have also filed an appeal to be a party to the case.

However, following the resolution of the interconnection issue later in the day, the matter may not come up for hearing tomorrow. Rajeev Chandrashekhar, chairman of  the Cellular Operators Association of India, said: "Since we have agreed to offer interconnection to the WLL operators, it's logical to withdraw the case. But that will be decided on Tuesday."

BS Economy Bureau in New Delhi
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