Tata Teleservices takes on incumbent GSM operators

In a declaration of war against the country's largest telecom association, the Cellular Operators Association of India  and its older members, Tata Teleservices Ltd's managing director Anil Sardana, said they were waging a 'wilful' campaign to 'subvert' the regulator's recommendation on spectrum pricing which was aimed at equalising the playing field for all competitors.

The attack reflects the open schism in the association, in which TTSL is a new member with other Unified Access Service Licence holders such as Loop Telecom , Etilasat DB, Uninor and STel. The older, established, operators are represented by Bharti, Vodafone Essar and Idea Cellular.

The Tata tirade reflects the growing differences in the premier association. It comes on the heels of COAI's decision just a few days earlier to suspend the voting rights of three members, TTSL, Etisalat DB and Loop Telecom, for non-payment of legal dues which they owe the association.

The dissidents say they refused to pay legal dues for cases being fought against them as CDMA players (COAI members offer predominantly GSM service, compared to the rival Association of Unified Telecom Service Providers of India) or on which they have a different opinion.

Sardana told Business Standard: "The vociferous sound bites from incumbents and the COAI is a wilful campaign against the Telecom Regulatory Authority of India recommendations on 2G spectrum pricing, which is making a near-attempt to bring about a level playing field after many years of unhindered commercial advantage that some of the operators enjoyed."

By not participating in the discussions on the issue called by Trai and instead lodging statements outside of the process, he said, their idea was to create a distraction and 'meet their objective of getting the issue of a genuine level playing field on spectrum subverted'.

Bharti Airtel Chairman Sunil Bharti and Vodafone Essar have vehemently opposed the regulator's recommendation, made some months earlier, that GSM operators pay for spectrum beyond 6.2 MHz at the same rate as that of the recently auctioned 3G spectrum, a decision which would mean they fork out a combined Rs 20,000-plus crore (Rs 200-plus billion).

In their defence, the older incumbents note the department of telecommunications had laid down a procedure for allocation of spectrum up to 15 MHz and there was no condition in the allocated licence that spectrum beyond 6.2 MHz had to be paid.

This has been backed by affidavits in courts and official representations.

Many of the new COAI members are planning to revive their earlier idea of setting up of an alternative association for themselves. Says a top executive of one of the operators who have been suspended: "COAI is run by three companies, who control 33 votes out of 59, based on their revenues.

And, therefore, can push any resolution. We would surely prefer to join an association in which we have some say."

Sardana has also accused the association and its incumbent members of deliberately confusing the stakeholders. "It is an organised campaign to confuse the real issue as to how such of the operators are hoarding premium spectrum way beyond 6.2 MHz and even in excess of 8-10 Mhz.

That, too, in the 900 Mhz band at many circles, whereas most of the other operators do not even have start-up 4.4 MHz spectrum. The sound bites thus being rotated at regular intervals are clearly to influence the decision makers to not notice this aberration."

He says by liberally allowing incumbents to keep spectrum up to 10 Mhz, when the new players did not have even half the quantity, it has reduced the former's requirement for both capital and operating expenditure (more spectrum means lesser towers to build), giving them an undue advantage.

"Having got the benefit, incumbents swung on to launch a campaign against Trai's said recommendation, so that they could fetch a concession of lower charges from the powers that be for retaining the excess spectrum and that would let them continue with the supremacy of spectrum retention," he said.

He added they could have easily returned the spectrum if they found the price too high.

COAI director general, Rajan Mathews, said: "Yes, there are differences and that is why COAI has not taken any official position on the matter. In a democratic set-up, this can happen."

On new operators looking at setting up a separate organisation, he said: "We cannot force someone to be a member or to leave the organisation if they think they are disenchanted. However, we opened the doors for them when they joined and wish they continue to stay."

Mathews said their rules were transparent and action has to be taken on whoever violates these and it is not about big verses small and new operators.

He also argues that operators like TTSL chose to remain members of two associations (they are also in the Association of Unified Telecom Service Providers of India) and therefore got voting rights according to their revenues.

"They could have got more voting rights in COAI if they added their CDMA revenues also, but they chose not to do so," he added.