Mobile operators in u-turn over unified licensing plan

4 Nov 2003

In a dramatic volte face, India’s smaller, non-profitable cellular players have decided not to fight the government’s plans to introduce a unified licensing system into the country, but will instead actively pursue claims for compensation totalling an estimated USD4 billion. The head of the Cellular Operators’ Association of India (COAI), T Ramachandran, said ‘we are not going to challenge the unified licence in the courts’, even though the cabinet decision of 1 November could result in some cellular companies going bust. India is keen to open up the mobile sector by encouraging fixed line operators to launch limited mobility wireless in the local loop (WiLL) phones. One of the chief WiLL players, Reliance Infocomm, has already signed up over 3.1 million customers to the so-called ‘poor person’s cell phone’ service, but more importantly, a court ruling in September 2003 granted the system regulatory approval and effectively legitimised its place in the county’s mobile sector. The decision initially sparked outrage from GSM operators which were forced to pay high fees for cellular spectrum licences and claimed that the fixed line telcos were being offered cut-price licences and would be able to enjoy lower rollout costs and thus charge lower rates – forcing some smaller cellcos to the wall. However in a remarkable twist, COAI has seemingly given up on legal action to hinder WiLL and will instead press for compensation to provide its members with a ‘sustainable business operation’.