Private entry into telecommunications saw some of the worst corruption in India: minister Sukh Ram went to jail after cash worth Rs 36 million was found in his prayer room, so did A Raja for taking enormous bribes, and Pramod Mahajan was murdered by his brother for not sharing his loot. I watched the drama; this was one of my writings on the goings-on. It went into Business World of 13 October 2003.
The telecom
imbroglio
Wireless in local loop (WLL) has spread
across the country like wildfire. TRAI had fixed matters so that telephone calls
across wired telephones were cheaper than across cellular telephones; WLL made
it possible to make calls on cellphones at the lower prices applicable to fixed
telephones.
Why did it do
so? Because the Department of Telecommunications issued licences for WLL
service only to wired telephone operators, and thus defined WLL as equivalent
to wired telephone service. It does not sound very logical to define wireless
as wireful; why did the Department of Telecommunications indulge in such legerdemain?
No rational answer has ever been offered to this question; hence the widespread
impression that there was a bargain between the wired telephone operators and
the then minister of telecommunications, Pramod Mahajan. No such misgivings
have arisen around his successor, Arun Shourie. But the fact that he refused to
show the relevant files to litigants confirmed the impression that the award of
WLL licences involved some impropriety. The TDSAT split in its judgment on this
issue. But both the chairman, who gave a minority judgment, and the other two
members who overruled him, agreed that the WLL services should not be allowed
to pose as cellular services. Although calls on WLL cellphones were allowed
only within Short Distance Calling Areas (SDCAs) within which wired calls are
priced at local calls, it was possible for a WLL subscriber to register himself
in two or more SDCAs and to ensure that the call was forwarded to another SDCA.
The majority judgment of TDSAT asked the government to prohibit this practice.
If the furtive
admission of wired telephone operators into mobile services was engineered by
the previous minister of telecommunications, his successor would find it
difficult not to keep the predecessor’s promise. It is no wonder, then, that he
took the matter to a Group of Ministers (GoM) who would share the
responsibility for any decision. The GoM could have decided to obey TDSAT’s
judgment or to appeal against it. In the event, it resolved to obey the
judgment. The government had leaned in favour of wired telephone operators in
giving out the WLL licences; but it did not want its bias to show in so blatant
a manner as to protest against TDSAT’s judgment. That judgment had been given
after Supreme Court overturned TDSAT’s previous judgment, which favoured the
wired telephone operators, and asked it to be more fair. An appeal to the
Supreme Court might have failed in the circumstances. The chances of success in
appeal no doubt played a role in the GoM’s decision.
Even if the
government does not, the wired telephone operators can go to the Supreme Court.
But they too must weigh their chances of success in light of Supreme Court’s
previous decision. The Supreme Court could not really allow wired telephone
operators to offer cheap calls across SDCAs without being inconsistent. Thus
the likely returns on further litigation look meager.
This must lead
to some dejection amongst the wired telephone operators even if Mahajan took
the decision to award WLL licences fairly and squarely. If he did not, they
must also feel betrayed. Of course, politicians are exempt from the rule that
promises must be kept. But even then, some heartburn amongst the aggrieved
parties is inevitable.
Such is the
impasse into which the government has led the wired telephone operators. But
quite apart from the rights and wrongs of the case, WLL services are
technologically indistinguishable from any other kind of cellular service. In a
seamless network, any telephone can be used to call anyone in the network; so
can a WLL phone. It is not technically possible to cripple a WLL telephone’s
capacity to call outside the SDCA; the prohibition can only be a legal one. And
if the law prohibits something that is technologically easy, it will be
flouted. The TDSAT’s judgment may be fair; but it wastes the investment wired
telephone operators have made in the WLL service; and it is difficult to
enforce. It cannot and should not be the final solution.
One way forward
would be to impose some penalty on the parties to the flawed decision and move
on. Here too, politicians are immune; the only punishable parties are the wired
telephone operators. And what might the punishment be? One possible solution would be to auction their WLL licences – on the understanding that they would
become fully comparable to cellphone licences – and to distribute the proceeds
amongst the cellphone operators in proportion to their investment. The present holders
of WLL licences may buy back the licences in the auction – or they may not.
That would be their choice. A painful choice; but surely they must see that
their present condition is unenviable and untenable.
