Dr. Ashwani Mahajan

Recently Telecom Regulatory Authority of India (TRAI) claimed that the day is not far when you would be able to make a mobile call for ten paisa only. Reason told was increasing competition among telecom companies on the one hand and declining per unit cost on the other. According to telecom companies per connection revenue has also been declining very fast.

Its known to all that there are two kinds of mobile technologies used in India – one is CDMA and the other is GSM. Two technologies are different, so the companies using these two technologies have also been different. Mobile phone entered this country with GSM technology. Leading company using GSM technology is Sunil Bharati’s Airtel. Along with this another company which entered is this field was Essar, later known as Hutch and now Vodafone. This company maintains second position in GSM. Apart from these two, BSNL (Public sector), Aditya Birla’s Idea, BPL, Spice etc are some other companies providing mobile services on GSM technology. Its known to all that when mobile phone came in, tariff lends were very high at rupees 32 for outgoing and rupees 16 to incoming. Customer base kept on increasing fray more companies kept on entering in and call rate kept on falling. But till the time CDMA based companies didn’t enter into the as, customers had to pay very high call rates, thanks to monopoly of GSM companies. Thanks to the entry of Reliance at the first instance and Tata later, level of competition increased many fold and the result was drastic fall in call rates. At present nothing could the said about comparative call rates of different companies, as these companies offer different kinds of plans, which are not easily comparable. To raise their customer base, companies offer zero to ten paisa call within their own network. For roaming customers they offer low cost roaming plans, for youths they offer night talk plan, different plans for short messages (SMS), different types of packs for STD calls and many more plans to woo more customers. Despite all this, still GSM tariffs are still higher as compared to CDMA tariffs.

Never the less, thanks to increasing competition, mobile call rates declined and customers enjoyed more and better choices. Today a customer who wishes to own a phone, can get the same in minutes. Prior to advent of mobile companies, it used to take 8 to 15 years to get a phone connection. Today an ordinary workman can and is also affording a mobile phone. Today a mobile in the hand of a Plumber, Carpenter, Electrician, Autorikshaw driver is a common feature. At the time of independence there were two phones per ten thousand of population. At present by the end of 2007 there are about, about 3 phone connections per 10 persons. Data shores that by the end of 2007, available there were 28 crore 57 lakh telephone connections, out of which mobile phones were 24 crore 56 lakh.

As landline phones are connected through wires, mobile phones are wireless. Medium to send signals in mobile phones is ‘Spectrum’. This spectrum is available with Ministry of Defence. This ‘Spectrum’ is freed from defence activities and is made available to the mobile companies by way of a license. Overall ‘Spectrum’ in the country is limited. Even Prime Minister says, that spectrum is a limited resource, which must be used judiciously. In fact quantum of spectrum allocated to a company would decide the maximum number of connections/customers of the company. That is the size of the company is decided by the size of the spectrum held by the company.

There was a time when telecom sector was completely controlled as it was completely under public sector. Expected expansion of telecom services could not take place because of complete control. Lifting of controls on the one hand and technological development on the other, played a great role in the development of telecom services in the country. Recently a big controversy arose due to sale of spectrum by the government. To expand their services, 46 companies were in queue for allocation of spectrum. This queue was determined in accordance with the date of original license of these companies. In the meanwhile companies who have been using CDMA technology, now applied for GSM licence. Their argument was, that they already have mobile licence (though it was for CDMA technology). Department of Telecom, Government of India, accepting Their argument accorded the status of GSM licence to Reliance Communications and also offered spectrum as desired by the company for rupees 1651 crores. It may be noted that Reliance communications was ready with a Bank draft of rupees 1651 crores. Thus among 46 companies, who had made 575 applications, Reliance Communication jumped the queue and was allocated spectrum. Another company who got benefited was Tata. According to experts, government last rupees 6000 crores in the process. Had the government adopted auction route, it would have got rupees 6000 crores more. Recently US government’s auction of spectrum yielding more than 16 billion US $ have proved them right. Alongside started legal battles and also a war of words between Telecom Regulatory authority of India (TRAI) and Department of telecommunication, (DOT) Government of India.

It is clearly evident from the chronology of events that in this battle among mobile companies, the government has tried to give undue benefit to one set of companies. Other companies, especially smaller ones are the losers. But this game of losses and gains are not limited to companies only. Experience in the past clearly reveals that due to campetition among companies the biggest gainer in the consumer, whose call rate have declined from rupees 32 for outgoing and rupees 16 for incoming to 50 paisa to one rupee for outgoing and zero paisa for incoming. Government has a special responsibility to encourage equitable competition among companies to benefit the consumers. The way in which the government has allocated spectrum to one set of companies, by a sudden change in policy, is against this spirit. If the government refrain from lobbyism and adopt fair policy, dream of 10 paisa mobile call can actually be realized.
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