POLICY WATCH: INTERVIEW
"There Are Many Anomalies In The Licence Regime"
In an e-mail interview from
his base in Chandigarh, former TRAI Chairperson S.S. Sodhi shares
his views on the recent WiLL controversy and other issues before the
regulator with BT's Suveen
K. Sinha
 Q. What is your opinion on the limited
mobility controversy?
A. There can and should be no
denying consumers the widest range of services that technology makes
available, of course, with due regard to quality and affordability. The
real issue in this controversy regarding will and limited mobility,
however, is whether the policy will promote competition in the long term
or kill it under the premise of immediate gain to the consumer.
The benefits of technology must flow to the
consumer, but under a policy that ultimately promotes competition as that
is where consumer interest lies. A market where both entry and exit are
without restraints is one that promotes such consumer interest. But when
competition is constrained by policy, both the government and the
regulator have to ensure that conditions of competition are not so changed
as to adversely affect one competitor or several competitors.
There is also the aspect of convergence of
technologies, which renders any attempt to distinguish between mobility
and limited mobility appear retrograde. In the context of converging
technologies, insisting that licences be technology-specific rather than
service-specific appears a medieval solution in a 21st century scenario.
TRAI has supported dot's ruling allowing
limited mobility for fixed service providers. As the chairman of the
erstwhile TRAI, do you think the regulator has analysed enough technical
and economic models before taking the decision?
TRAI does indeed have access to external
economic and technical resources. In a situation like the present where
the rules of the game are changed mid-stream, an investigation of the
impact on the incumbent as a result of the induction of fixed service
providers with cost-effective new technology, which prima facie gives them
an unfair edge has to be thorough, detailed, and above all transparent. It
is difficult to answer in the affirmative that the study on the basis of
which the regulator has made the recommendation meets this criteria. The
recommendations are qualified and based on assumptions of
non-substitutability.
The interconnect agreement is clearly in
favour of fixed service providers as they can retain 60 per cent of the
long distance call revenue, while cellular service providers have to pass
on 95 per cent of theirs to dot. What are your views on it?
The interconnect agreement for fixed
operators is based on the original licence, which allows them 60 per cent
retention of revenue from long distance calls. The licence sees for them a
specific role as wire-line operators, (which entails) offering telephone
on demand and plain old telephone services, and enhancing teledensity.
Cellular, on the other hand, is designated to be a self-sustaining sector,
even though an access charge regime would need to be evolved at some
stage. The NTP '99 emphasises these as being two distinct services, with
cable being the third. If service offerings are substitutable, as they
would appear with Fixed Service Providers (FSPs) offering mobility, then a
discriminatory interconnect regime would be retrograde and can lead to
serious anti-competitive practices by FSPs-especially by the incumbent,
which is the monopoly long distance operator as also the dominant fixed
service operator. Revenue sharing from long distance calls needs detailed
economic analysis and review.
Do you think cellular service providers
should be allowed to offer inter-circle connectivity?
This issue is really linked to the terms of
the NLDO (National Long Distance Operator) regime. Technically, cellular
operators can provide inter-circle connectivity; to actually do so they
require a separate NLDO licence. To permit cellular operators inter-circle
connectivity would certainly fulfil the affordability and convergence
criteria, but it could impact the attractiveness of NLDO for other
potential investors. If, however, the government now believes that since
convergence allows fixed operators to provide mobility then permitting
inter-circle connectivity to cellular operators deserves a rethink...
Remember, long distance tariffs have more
than halved since cellular operators have been allowed to provide such
services in competition to BSNL.
DoT has reduced STD tariffs but only for
intra circle calls. The amount that the consumer has to pay for an inter
circle STD call is much more than an intra circle call over the same or
even a longer distance. What are your views on this?
This is an issue that consumer
organisations need to take up. Long distance tariffs in India are, under
the current tariff-setting policies of the government, distance-based and,
therefore, reduction of tariff if the call is within a state but not so if
outside it regardless of the distance being less, cannot be justified. The
regulator will have to watch this discriminatory tariff practice
carefully.
The Convergence Bill does not propose a
single licence for telecom services. Are you then in favour of a single
licence regime?
As a concept a single licence sounds good
but the more relevant need is for all licences to be comparable in rights
and obligations. As matters stand at the moment there are many anomalies
in the licensing regime. In a single licence regime there would be need to
allocate spectrum in a fair, transparent, and non-discriminatory manner.
Once the private sector participation route has been taken the challenge
it poses for both the regulator, and the government is to reconcile
consumer interest with investor confidence.
All the private fixed service providers
have been targeting corporate customers, not paying much attention to
individual subscribers. Can you think of a regulatory structure under
which this can be corrected and the teledensity improved?
It does indeed appear that private fixed
operators are looking only for high revenue paying customers. I
experienced this myself when I sought a phone connection from the private
operator. I was asked what my monthly billing was. When the company heard
what it was it said that there was no line to my area! Besides targeting
corporate customers it seems that they are looking to raise revenues from
a different business, limited mobility. The fps policy needs a review to
ensure that such operators have a robust revenue stream to accompany the
roll out obligations. The current attempt to permit a competitive mobile
service to boost the fps revenue stream is clearly misconceived-a step in
the wrong direction.
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