Ensuring the telecom solution works

Since both MTNL and DoT have a lot of basic infrastructure already, their services will be a lot cheaper than those offered by private operators. So any delay in their programmes benefits private operators, especially in the metro cities where the competition is the most intense.

The two cases arediametrically opposed to one another 8212; curbing the TRAI will hit the private operators while curbing the DoT/ MTNL will benefit them 8212; but both, essentially, amount to leaving a lot of discretionary powers in the hands of both politicians and bureaucrats, to either benefit private operators or play ducks and drakes with them. A look at some of the issues which the government needs to address to ensure the new package works equitably.

In its letter regarding the new package, the ministry of communications has said that this is contingent on the operators withdrawing all legal proceedings in court. This, however, also involves one on the jurisdiction of the TRAI. Last year, in March, the TRAI had stalled MTNL8217;s foray into cellular services, stating that its license was not valid.

The government then argued that the TRAI had no jurisdiction over what were essentially licensing issues, and the Delhi High Court ruled in its favour. This was then challenged by the private operators, who felt an independentTRAI was in their interests. The court is yet to give a decision on the matter, but the government is keen that the case be withdrawn 8212; essentially, it wants the power to either benefit or hurt a private telecom operator at will.

In the last meeting of the full Telecom Commission it was decided that a separate planning group would be set up to deal with the various technical and commercial aspects of DoT8217;s proposed foray into cellular services in 17 cities. A separate case for the creation of this group, the minutes say, will be brought before the Telecom Commission at an appropriate time.

Private operators, in constant touch with the communications ministry, cite this as evidence to the verbal assurance they8217;ve been given, that it will be at least two years before the DoT/MTNL will be allowed to set up full-fledged cellular services. In which case, private operators will benefit tremendously, as they will no longer be under pressure to reduce their tariffs because of the increased competition.

Thesharp reduction in license fees that private operators will now have to pay has been justified by saying they will also make a lot less profit under the new system 8212; while the earlier fixed-license-fee system allowed for only two players, the new revenue-sharing one allows a free-for-all. This, however, appears more of a fig leaf than anything else.

The report of the Spectrum Management Committee, set up to examine the issue of air frequencies that had to be allotted to various players, for example, has said that it will be possible to have only two more players in each telecom circle, apart from the existing ones. And the New Telecom Policy says that, based on the currently available air frequency spectrum, only one more operator can be allowed in each service area, and that will be the DoT/MTNL.

In other words, it is by no means certain, and certainly not automatic, that new players will be able to enter existing telecom circles to offer cellular services. Clearly, these are all issues that the PrimeMinister will need to address properly if he wishes to end the tremendous controversy that the telecom package has already generated. It is vital, for example, that to ensure equitable development of the country8217;s telecom, and one relatively free of charges of corruption, he ensures the independence of the regulatory authority, if need be by instructing the ministry of communications not to armtwist operators to withdraw their pro-TRAI case.

Similarly, he will have to ensure that no attempt is made to curb either MTNL or DoT from going ahead with their plans. The excuse most likely to be used is that DoT/MTNL don8217;t have any convincing feasibility studies or market survey reports to show how profitable these new ventures will be.

No one8217;s suggesting DoT/MTNL don8217;t do their homework, but no frivolous excuses should be used to delay them 8212; recently, a highlevel meeting of secretaries asked DoT/ MTNL to run only pilot services till such a feasibility report is made and found satisfactory. Adequateavailability of air frequencies or spectrum to allow new operators to come in quickly will also have to be ensured 8212; essentially, this involves coordination with the armed forces, to get them to relocate frequencies, to free up certain air-bands required by telecom companies.

All this, of course, will have to be done by the Prime Minister8217;s Office, ince it is they who8217;ve been pushing the entire telecom package. They8217;ve pushed the package, now it8217;s up to them to ensure it is not distorted. Unless, of course, their job was just to push the package.