By Ranjit Devraj
NEW DELHI, Apr 18 2001 (IPS)

The Indian government’s plan to offer a cheap mobile phone service is facing stiff opposition from existing providers of the service who fear losing subscribers.

This will use the government-controlled fixed phone network and wireless-in-local-loop (WiLL) technology to provide limited mobility at no extra tariff.

WiLL works like an extended cordless phone with a range of 50 km. Newspaper advertisements are promoting the new technology as the “poor man’s cell phone”.

But existing cellular phone operators who use costlier GSM technology and have paid over 1.7 billion U.S. dollars in license fees to the government, are crying foul.

According to latest government estimates, India’s present 3.2 million mobile telephone connections are expected to increase to about 20 million by the year 2005.

The government argues that allowing fixed phone operators to offer limited mobility would speed the expansion of telephone services to otherwise poorly accessible areas.

Several state governments are demanding quick introduction of WiLL technology.

“My state has a lot of stake in the new technology because it will help us reach the remote villages in the shortest possible time,” says Digvijay Singh, chief minister of the sprawling, but backward central Madhya Pradesh state.

The chief ministers of western Rajasthan and southern Andhra Pradesh states too have expressed keen interest in starting the cheap mobile phone service.

The poor man’s mobile phone is supported by the Association of Basic Telecom Operators, which accuses cellular operators of fleecing customers by charging exorbitant rates and arbitrary billing.

“Now that there is an effort to pass on the benefits of technological advancements to consumers with cheaper and better telecom services, they are protesting,” said the fixed phone operators’ association.

But S.S. Sodhi, former chairman of the Telecom Regularity Authority of India does not agree that it is really a poor man’s mobile phone.

He says that though “limited mobility may seem to pass on the benefit of advanced technology at an affordable price,” this will not really help the lower income people.

Sodhi points out that the WiLL handset will cost over 250 dollars, which is far too expensive for most ordinary people in India.

However, Telecom Watchdog, a consumer interest group, accuses Sodhi of speaking on behalf of cellular operators.

The consumer body says that mobile phone operators have made profits of more than 3.2 billion dollars since the service first began in India six years ago. With the expansion of cellular services in coming years, the profits will be higher, it adds.

The providers of the cheaper mobile phone service are confident that the cost of the WiLL phone will come down in the same way as that of cellular phones over the years.

Moreover, they point out that the new technology poses no threat to the cellular operators. WiLL technology cannot offer roaming facilities, text messaging and other value added services offered by cellular phone providers.

“There is a little doubt that from a consumer’s standpoint, the limited mobility service using WiLL is a welcome development as it offers a wider choice and at an affordable cost,” said the leading business newspaper, ‘Business Line’.

In an editorial, the paper noted that private cellular operators stand to lose heavily since WiLL tariffs are expected to be about one- seventh of the cellular service charges.

However, it said the government should ensure a “level playing field” in the mobile phone business.

“As a first step the government can contemplate issuance of a composite license to offer both cellular and basic services with the same terms and conditions governing the two services,” it suggested.

This would allow cellular and basic operators access into each other’s area of operations.

This in turn will end the government monopoly over basic (fixed) telephony, which is widely held responsible for the long delays in getting telephone connections and inefficient services.

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