Net Loss for the Consumer

The slugfest between cellular operators and WLL players has ended up injuring

the sole they had proposed to protect–the consumer. The press conference saw

the angry outburst of cellular operators decrying the unfair treatment meted out

to only a certain section of consumers having to pay an access charge of Rs 1.20

each time a call was made to a landline or a WLL phone. The cellular operators

say that GSM subscribers shell out an additional Rs 1,600 crore of revenue as

access charges which goes straight to the coffers of the basic or the WLL

operators as the case of interconnect may be. The standoff between the two sets

of operators had resulted in the cellular operators snapping off interconnection

to WLL subscribers.

However,

as per the peace brokered by the Minister it is the consumer who stands to lose

out in the overall bargain. Cellular operators have agreed to connect to the WLL

networks till the Interconnect User Charge (IUC) regime is in place and

implemented with retrospective effect. The IUC is a charge levied by operators

to connect a call from one network to another. Currently only cellular operators

pay an interconnect charge of Rs 1.14 to connect to a fixed line or a WLL

operator.

But the IUC regime is expected to levy an access charge of 38 paise per call

as interconnect charge for all operators. This means that while the access

charge for GSM subscribers comes down from Rs 1.20, it is likely to hike the

tariff for basic and WLL operators.

It may be argued that one set of operators (read GSM) couldn’t care less

about the interests of another set of consumers (fixed-line or WLL). But here we

are talking of the entire base of telephony consumers and not just one exclusive

group. So while GSM operators raise the boogie of consumer interest to broker a

deal for 1 crore consumers, we need to remember that tariffs for 4 crore

fixed-line and WLL consumers have also been increased. Besides, most cellphone

users also own fixed lines.

The basic service operators association, ABTO, has already warned that there

is likely to be an upward revision of call rates after the new IUC comes into

effect. Since basic phones still outnumber GSM phones, the number of outgoing

calls from a basic line to a cellphone would be more than that from a GSM to a

landline or WLL phone. According to COAI guesstimates, the percentage of calls

made from a mobile to the PSTN network stands at 45%. So a larger number of

consumers would pay more to connect to a GSM phone, at least till the number of

GSM subscribers outnumber the fixed line subscribers.

The lobby for basic service operators is sounding the alarm, "All we are

saying is if there’s an attempt by cellular operators to force a backdoor

entry into CPP, it should be discouraged," says R Srinivasan, ABTO counsel.

Basic operators contend that the "CPP regime has been overwhelmingly

rejected in all TRAI open houses held since 1998."

Even for GSM subscribers, the benefit from the new access charge will not be

substantial. While the slab is expected to be decreased from three to two

minutes, a GSM subscriber would have paid Rs 1.20 as access charge for three

minutes, now the GSM consumer will pay 76 paise for a three minute call.

Therefore, the net gain to the GSM consumer would be 44 paise for the same

duration.

Under the new ICU regime, basic services and WLL consumers will have to pay

an extra 38 paise as access charge for every call they make to another network

in addition to the Rs 1.20 call charge under the current tariff structure.

Unless the current tariffs are revised, basic and WLL consumers would have to

pay Rs 1.58 for any call they make to another network. The new bargain also

spoils the business case of WLL operators particularly the much-touted Reliance

tariff of 40 paise per minute, which would become exactly double if the access

charge were passed onto the consumer.

Balaka Baruah Aggarwal



CNS