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Cellular firms put future projects on hold

India's cellular industry has put on hold all future investments and network rollouts to protest a telecom regulator suggestion that fixed line phone firms offer limited mobility, an industry body said.

"...no new funding would be available for any of the cellular projects...unless a detailed circle-wise analysis of commercial implications is known," the Cellular Operators Association of India said in a statement.

The Telecom Regulatory Authority of India had said earlier this week that fixed line operators be allowed to offer limited mobility using wireless in local loop (WLL) technology.

It said cellular firms could be compensated for possible fall in revenues.

Cellular firms vehemently oppose the use of WLL, a cheaper technology, by fixed phone firms, saying it would cut into their revenues.

The statement said the largest beneficiary of WLL-based mobility would be the state-owned Bharat Sanchar Nigam Ltd, the biggest player in the domestic telecom sector which is divided into 22 circles or zones.

Limited mobility using WLL technology has created acrimony between the two sides ever since fixed-line firms sought government permission to introduce it, saying it would help cut costs for rural telephony and consumers.

WLL offers mobility in an 18-20 km (11-12.5 mile) range by linking exchanges and customers' fixed phones to handsets in a limited loop.

Although considered inferior in service quality, backers of limited mobility say it can cut costs to a tenth of cellular services.

A three-minute call from a mobile phone in Delhi costs Rs 12, while WLL technology will allow the same at Rs 1.2.

Cellular firms, which have only lately started seeing subscriptions take off after years of poor growth, are worried that lower tariffs could lead to customers jumping ship.

India's cellular subscriber base was 2.93 million at end-November 2000, up 82.8 per cent from 1.60 million at the start of January, but the cellular industry is still reeling under the burden of accumulated losses of Rs 76 billion.

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