Reinventing regulation

The ongoing public spat between two powerful lobby groups in the telecom sector is symptomatic of the rot that has seeped into an industry that was once hailed as the poster boy of reforms. Long drawn litigations between telecom operators, allegations of bias against the regulator and inconsistent policy making have become more the norm rather than the exception. Ever since private players were allowed to offer telecom services in 1994, the telecom growth story has been marred by events that have time and again exposed the ugly face of the sector. Unfortunately, both the regulator — the Telecom Regulatory Authority of India (TRAI) — and the telecom bureaucracy and the political dispensation at the Centre have not only failed to stem this rot but have also often been accused of playing favourites. The showdown now between Mukesh Ambani’s Reliance Jio and the incumbent operators led by the Cellular Operators Association of India over interconnection is only the latest example. While the incumbent operators have accused Reliance Jio of clogging their network as a result of the free services offered to 1.5 million test users, the latter has blamed Airtel, Vodafone and Idea Cellular for not releasing adequate points of interconnection.

Interconnection is critical for consumers to be able to talk across operators’ networks seamlessly. Yet, disputes related to interconnection have dogged the telecom sector for the past two decades. In 2003, for example, the then larger incumbent operator MTNL, under political pressure, pulled the plug on interconnection with private operators’ networks. As a result, subscribers of the private operators could not call MTNL users for days. There are at least a dozen such cases between operators being fought in various tribunals and courts when the matter should have been resolved by the regulator.

The inconsistency shown by the TRAI in laying out adequate regulations over the years has led to a trust deficit. The constant tiffs between the TRAI and the Centre also do not help. It is, therefore, no surprise that the COAI has accused the regulator of being biased against incumbent operators. Perhaps it is time for an overhaul of the telecom regulatory system, as the existing format with a chairperson and two full time members has not been able to convince stakeholders of its neutrality. The Centre could take the lead in setting up a body with representation from all stakeholders to take decisions on key aspects of telecom regulation. This would cut out the scope for any bias in decision making and instil trust among operators. The consumers would be the winners at the end of the day as service providers can get back to competing in the marketplace instead of courtrooms.

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