LEADER ARTICLE
Telecom Travails

The telecom sector in this country has been a beehive of controversies ever since it was deregulated. The licensor, regulator, policy-maker, even industry, have all played a role in keeping the controversies alive. The most recent one to fuel the fire has been the regulator with the ill-timed release of its consultation paper on ‘‘Unified Licensing for Basic and Cellular Services�.
A lot has already been said about the paper and how it seems loaded in favour of one party at the cost of the others. A detailed analysis of the paper, as also the various petitions filed with the TDSAT (Telecom Disputes Settlement Appellate Tribunal), however, does little to quell these doubts. In some cases, the statements border on falsehood, while in some it appears the regulator has taken upon itself the task of dispute settlement, something it is not mandated to do. Even more important, and intriguing, it seems to bypass a parliamentary process currently on — the Convergence Bill — that is an umbrella proposal towards a unified licence envisaging a scenario much deeper than mere convergence of basic and cellular telephony alone. As is well known, this Bill has yet to find a parliamentary consensus.
Coming back to the paper, right in the beginning, delving on the need for a unified licence, it says: Most of the basic service operators (BSOs) in India deployed IS-95-based WLL systems. Though these systems were capable of providing mobility, this was not allowed as hand-held subscriber terminals for WLL were not allowed as a regulatory restriction. This is incorrect. Denial was a result of the licence agreement, not regulation.
In some cases, the language and substance of the consultation paper is deceptively similar to the one used by the fixed line operators in the TDSAT, forcing one to wonder who is steering the car and what the regulator is doing in it. In the section on key issues in implementing unified licensing, the paper generalises that modifications have been made for cellphone operators from time to time in some form of a sop, and that included permission to use mobile PCOs. This again is a misrepresentation.
It is not a sop, but has been permitted explicitly as per the New National Telecom Policy 1999. One can go on dissecting the paper to find holes in it, which is not difficult, but given the circumstances, and the brazenness with which falsehoods are propagated these days, one is not sure if it will make any difference. The fact is that the TRAI (Telecom Regulatory Authority of India) paper is trying to settle a dispute on which a judgment is imminent any time now. Apart from the timing, which is suspicious, dispute settlement is not its mandate. Moreover, TRAI itself may be nailed as the villain of the piece by TDSAT. In such circums-tances, what prompted it to issue such a paper will remain a mystery to everyone except those who follow the sector closely.
The recent UBS Investment Research report on the issue has already nailed the regulator, especially where it asserts that the regulator, in the event of the TDSAT judgment cancelling the WLL licences, will “introduce a Universal Licence as a back-up measure�. The telecom sector in the country has been beset with problems ever since it was thrown open to competition. Wrong policies, constant tinkering with a seemingly good policy, an overactive, or a submissive regulator, once in a while a minister who believes in throwing caution to the winds, the constantly shifting stands of industry bigwigs on every issue, be it FDI or migration, and several other reasons, have all played a role in making it the mess that it now is.
The only way to stem the rot is to do a thorough post-mortem of the sector, and taking some harsh decisions, instead of providing piecemeal solutions at the behest of vested interests. One had expected that with the new minister at the helm, these issues would be addressed on a priority basis. These expectations were belied. The reconstitution of the TRAI board, however, had everybody excited. After the disastrous experience with the previous pliable board, which perhaps did more damage to the sector than everything else put together, this seemed like a breath of fresh air.
Everyone welcomed the coming aboard of people with squeaky-clean reputations. This consultation paper, however, has shocked everybody. It is difficult to comprehend what has gone wrong. One cannot believe that everybody on board would have readily agreed to the content and timing of the paper. If not, then who is calling the shots there, so much so that some strong personalities have been neutralised. And what explains their silence? People are quite upbeat about telecommunications. There is a buzz all round, but the way things are progressing, the celebrations might prove a bit premature.
The regulator’s job is to ensure fair competition, and the underlying consideration in anything it does is the consumer’s interest. Is the consumer getting the desired quality at affordable rates, and is this quality sustainable? If the answers to these are satisfactory, the regulator will have done its job. But it would seem that after the first lot of regulators, who were shown the door rather unceremoniously, others have yet to realise the importance of the task they have been entrusted with. The present lot raised the expectation bar high, but has been found hopelessly wanting when it came to delivery.