In a majority judgment, the three-member TDSAT upheld the legality of the limited mobility services (using the wireless-in-local loop). At the same time, it also directed the Department of Telecommunications (DoT), to ensure, in consultation with the regulator — Telecom Regulatory Authority of India (TRAI) to ensure that:

It was hardly surprising that both the warring camps — basic (such as Reliance Infocomm and Tata Tele Services) and cellular (Bharti, Hutch or BPL) — claimed victory immediately after the TDSAT verdict. Over the past week, the Cellular Operators Association of India (COAI), representing the interest of the cellular operators in the country, has decided not to appeal to the Supreme Court against the TDSAT order for now. Instead, it has decided to give time both the DoT and TRAI to enforce the TDSAT judgment in "letter and spirit".

The cellular gambit

At this stage, there is no need for the cellular operators to act in haste. Over the next few weeks, cellular operators are likely to watch out for three developments which may be crucial to the long-term interests:

One, over the past week, the COAI has written to the DoT and TRAI to enforce the terms of the TDSAT judgment. One of the crucial terms of enforcement is to ensure that the limited mobility handsets are used only in the short distance charging area (a defined radius of, say, a city or town) and handover of calls are curtailed altogether beyond this pre-defined radius through appropriate software. As this term (and some others) are to be immediately enforced, these will help members of COAI test the bona fides of the Government and the regulator in honouring the TDSAT judgment. And also let a consumer realise the distinction in the nature and features of a limited mobility and full-fledged mobile service. Reports suggest that TRAI has already acted on the issue. On August 14, it recommended to the DoT that basic operators be prohibited from handing over calls between SDCA (short distance charging area) by mechanisms such as multiple registration or inter-SDCA call forwarding. This will require DoT to consider a clarification or amendment to the basic operator's licence agreement. The ball is now in the DoT's court.

Two, the TDSAT is to take up the case filed by cellular operators involving deployment of V5.2 interface (which restricts value added services such as SMS, ring tones, video clips) by limited mobility operators. This is instead of the advanced mobile switching centre (MSC) architecture which helps them offer these value added services. The hearings on this case from both basic and cellular operators are to begin on August 19. The direction of this case, favourable or unfavourable, will also help the cellular operators determine their future course of action.

Finally, TRAI recently said that it will start seeking industry opinion on levying the additional entry fee on basic operators for allowing them to offer limited mobility. Since industry opinion will provide some indications of the nature and quantum of fee to be levied on them, cellular operators will be better placed to evaluate their position. If the cellular operators have reason to feel aggrieved on any of these counts they may take the issues to a higher court in the months to come.

Boxed into a corner?

Unlike the cellular operators, there is no disputing the fact that the basic operators have been caught on the backfoot. Clearly, the tribunal verdict imposes greater uncertainty to the gameplan and operational viability of the basic operators. Except for pronouncing limited mobility to be legal, the TDSAT verdict may turn out to be onerous one for them in several respects. On the operational front, the clarity on SDCA and call hand-over will be a blow, in the sense that violation of these conditions may amount to a breach of legal verdict. In addition, any unfavourable verdict on V5.2 interface may have implications on operational viability. Finally, the tariff plans of basic operators may have to change to accommodate the additional entry fee.

It will be naive for anyone to assume that this controversy is likely to end on this note. In mid- July, TRAI put out a Consultation Paper on "Unified Licence between Basic and Cellular Services" which aims to discuss allowing the players in these two services to enter into each other's domain. Introduction of this proposal ahead of the TDSAT verdict kicked off a storm of protest from the industry, particularly the cellular operators. Bowing to pressures from different sections, the scope of the proposal was enhanced to include "convergence" of long-distance and other value-added services. The discussions on "Unified Licence" is to run parallel to TRAI recommendations for enforcing the TDSAT verdict. If the past is any guide, this proposal may be the Pandora's box of controversy for the future.

(To be continued)

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