The Supreme Court's judgement in the case of cellular services providers versus fixed telephony firms offering limited mobile services (or wireless in local loop) is being seen as a guarded victory for WLL.
Analysts say that though the Supreme Court has not completely vindicated the stand of fixed-line operators offering WLL, its refusal to grant a stay on the expansion of WLL services and referring the matter back to the telecom appellate tribunal is a vote for WLL.
"The Supreme Court's judgement is likely to have no implications on this case. It has sent the case back to the telecom tribunal that has shown positive vibes towards WLL earlier. They have just asked them to go through the case again and see if there is any room for a solution," says a telecom analyst.
Cellular service providers had cried foul against the TDSAT judgement, allowing WLL by fixed line operators, decrying the lack of a level playing field. The Cellular Operators Association of India has long termed the competition from fixed line operators providing WLL as 'unfair.'
"The biggest threat facing the growth and investments in the mobile sector is the uncertainty created due to the government decision allowing fixed service operators to provide CDMA -- code division multiple access -- based WLL limited mobility, without a proper mobile license and on favorable terms," the association has said earlier.
According to the COAI, the introduction of WLL by fixed line operators violates the existing telecom policy (New Telecom Policy, 1999), that has laid down the roadmap for introducing additional competition in the cellular business.
Allowing WLL would in effect also mean increasing the number of mobile service providers in a circle thus resulting in losses for the existing operators.
In a recent letter to the government, the COAI has said that the proposal to introduce unfettered competition does not make business sense or serve consumer interests. It has maintained that Indian consumers have benefited substantially because of the strong competition among the existing players that has resulted in telephone rates dropping sharply over the past three years.
But the Telecom Regulatory Authority of India, the TDSAT and the Supreme Court have all disagreed with this plea.
"We do not accept the contention of cellular operators to restrain fixed service providers from taking new subscribers on WLL-M as it will be detrimental to the consumer interest," the Supreme Court bench, comprising Justice H K Sema, Justice S B Sinha and Chief Justice G B Pattanaik said.
Yet, T V Ramachandran, COAI director general, has declared the judgement a 'positive thing' for cellular providers. "The Supreme Court has remanded the issue back to the tribunal. The no stay on WLL is a secondary issue. What is important is that the case is open now. The point of view that I would take about the judgement is that it says if you are going to roll out WLL it is at your own risk."
Analysts that that the cellular service providers are to an extent fighting for a case that is fair from a business stand point. When cellular services were introduced in 1995, the government levied hefty license fees on the players.
The cellular players are estimated to have paid up to Rs 9,000 crore (Rs 90 billion) as license fees to the government on an all-India basis.
In contrast, WLL service providers are the fixed line operators who have paid no license fees to the government for the WLL service and only a marginal fee of Rs 495 crore (Rs 4.95 billion) on an-all India basis for operation as fixed line service providers.
This anomaly has led to the cellular service providers opposing WLL tooth and nail.
"The cellular service providers are condemning the lack of a level playing field because they need to recoup their investments. WLL is being offered by service providers without the need for any licensing fees which is not fair to the earlier players," says a telecom analyst with rating agency ICRA.
What has made cellular service providers jittery is that WLL offers almost all the convenience of a cellular phone at lower costs and with superior technology.
For instance, the WLL service provided by Mahanagar Telephone Nigam Limited in Mumbai does not charge for incoming calls while outgoing calls are charged at Rs 1.20 for three minutes.
This is in contrast to the tariff that is charged by cellular service providers, in which a user pays for both incoming and outgoing calls and tariff can range from Rs 0.80 per minute to a peak of Rs 1.70 per minute.
Where cellular services score over WLL is in terms of the roaming facility or the coverage area provided on the phone. But if analysts say that it is small consolation.
"Currently, about 20-25 per cent of cell phone users have roaming facility on their phone and just about 10 per cent use it. So that means that the rest 90 per cent, in theory, stand a good possibility of switching to WLL. They might not be willing to pay the premium for roaming on cellular services and would prefer WLL. That's why the cellular operators are very worried," says the analyst with ICRA.
Though the Supreme Court has said that it is remitting the case back to TDSAT for reconsideration' little has changed from the time when the TDSAT passed its judgement allowing fixed line operators to provide WLL to the Supreme Court sending back the case to them.
In this event, TDSAT is not expected to change its stand on the issue.
"This is only going to delay the process in terms of full fledged implementation of WLL. But I would largely see the judgement as neutral. It ultimately boils down to the fact that no one wants to make a firm decision right now over this issue," says the analyst with ICRA.
However, many fixed line providers like Reliance Telecom, Tata Teleservices and Bharat Sanchar Nigam Limited who were planning to bundle WLL along with their services now have the green signal to go ahead with their plans aggressively.
BSNL already has 75,000 WLL subscribers in the country while MTNL has 40,000 subscribers in Mumbai and Delhi where it offers the service.
