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Cellular firms may sue Trai over unified licence

Thomas K Thomas in New Delhi | July 18, 2003 09:36 IST

Cellular service firms have threatened to take the government and the Telecom Regulatory Authority of India to court if they pursue the concept of a unified licence.

They said the regulator was repeating the mistake made three years ago in allowing wireless-in-local-loop limited mobility, wherein policies were made to cater to the interest of a single company, leaving the entire cellular industry at bay.

The operators said Trai was once again attempting to bail out WLL operators by restricting licence unification to cellular and basic operators.

"If Trai is serious about a single licence, why not merge the long-distance licence as well? We would like to offer STD and ISD services on our own," an executive with a Delhi-based cellular services firm said.

"It seems from the consultation paper that Trai has already made up its mind on implementing a unified licence. The Trai paper has given only the positives and benefits of such a regime and has not addressed the dangers of converging cellular and basic service licences," a senior industry representative pointed out.

A Trai consultation paper usually gives the pros and cons of a policy, leaving it to the stakeholders to evaluate the options.

The Association of Basic Telecom Operators, on the other hand, has welcomed the move. Reliance Infocomm and Tata Teleservices will be the prime beneficiaries of the move because they will be able to offer full-fledged mobile services. Basic operators said a unified licence was the only way to resolve the WLL dispute outside court.

"Cellular operators are trying to protect their turf. They have been in operation for over eight years, which gives them the first-mover advantage over new operators. In fact, this gives them the opportunity to expand through cheaper acquisitions," an executive with a basic operator explained.

He said companies like Reliance were already offering synergised services, including roaming and broadband, even without a unified licence.

Trai officials said the reaction of cellular operators was premature because the issue was only at the discussion stage.

"We have given everyone the opportunity to present their views by issuing a consultation paper. A decision will be taken only after weighing all opinions," a Trai official said.

While the Cellular Operators' Association of India would soon be making its strategy clear on the issue, industry sources said the move would be opposed more violently than during the WLL-limited mobility controversy.

Cellular services operators said they would not accept the proposal even if the government attempted to bring in parity by asking WLL operators to pay an entry fee.

"The entry of two more large, full-fledged mobile operators will change the dynamics of the business. The issue is going to open up a Pandora's box of litigation," the cellular firm executive said.

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