INTERCONNECT: Impasse or Bad Blood?

VoicenData Bureau
New Update

The recent interconnect stand-off between the cellular operators and the

basic operators offering limited mobility services brought out the ugliest face

of Indian telecom scene to the fore. Cellular operators resorted to unilateral

blocking of all calls originating and terminating into limited mobile operator’s

network putting the users at a receiving end. This was compounded by MTNL

blocking all cellular networks in Delhi for about two days, thus inviting the

wrath of cellular operators and subscribers who were virtually stranded for want

of connectivity to cellular network.


It all started off when GSM operators, alarmed by the launch of Reliance

Infocomm’s CDMA mobile services, panicked to the extent that they took a

series of measures including the bizarre one of blocking Tata Teleservices’

WLL to begin with.

AirTel blocked Tata Teleservices because it wanted a revision in the

commercial agreement. The licensing agreement says that there should not be any

unilateral termination of services which causes inconvenience to subscribers.

When cellcos realized that limited mobility operators had found an ingenious way

of bypassing their network and reaching WLL subscribers using the BSNL and MTNL

networks, they got aggressive calling incumbents’ decision as violative of the

interconnect agreement.

TRAI intervened and took note of Tata Teleservices grievances and ordered

AirTel to restore interconnect in three days.


AirTel and other aggrieved cellular operators moved to TDSAT against the


Later, the Supreme Court judgement set aside the TDSAT order and referred it

back to the tribunal to take a relook at the level playing grievance of the

cellular operators. Cellular operators also got an open letter to TRAI published

in all leading national dailies. However, BSNL and MTNL, who together have about

1 million cellular subscribers, were not part of the cellular operators’


The letter addressed to TRAI concluded that cellcos could offer more

affordable services to their subscribers if the regulator fixes the interconnect

usage charge (IUC) equitably. TRAI took strong objection to cellcos going public

and termed it as a pressure tactics to influence the regulator. It, however,

said that it would come up with the IUC. With the then communications minister

Pramod Mahajan away in South Africa on an official tour, the government refused

to be drawn in the controversy, stranding millions of subscribers who could not

connect properly for more than a week. On his return, Mahajan, urged cellcos to

take decisions of regulator and tribunal sportingly instead of taking a

combative stance by blocking the services. He went to the extent of supporting

MTNL’s act of blocking all cellular operators in Delhi, terming it as ‘tit

for tat’–something that shocked everyone.


TRAI’s role in the whole impasse also came up for a lot of criticism. The

fact that TRAI was sitting on the Telecommunications Tariff Order 2003 and IUC

regulation for a long time had made cellular operators lose their patience. It

was only after cellcos went all out against TRAI that it issued the statement

that it would come out with order by the end of January, which it did too.

However, TRAI’s Tariff Order and Interconnection Usage Charge Regulation

2003 could not satisfy both cellular operators and basic operators, apart from

fixed phone users. The highlight of the directive is that WLL operators have to

pay interconnect charges to access cellular networks, and basic services rental

and tariff will go up.

Voices of discontent have started flowing in from basic operators. Cellular

operators have not been forthcoming with the their view which is understandable.

The new interconnect regime is scheduled to be effective from 1 April 2003, but

there is a strong possibility of some last-minute changes, considering the

initial reaction from the industry. S Ramakrishnan, who took over as the

president of ABTO, said, "The new IUC regime, if implemented, would push up

costs, and the industry would be left with no option but to pass on the burden

to the customer to remain viable. Of course, each individual operator will have

to decide how to go about it."


BSNL officials have been quoted as saying that the new interconnection usage

regime would hit bottomlines of BSNL. MTNL and BSNL are reportedly filing

alternative tariff packages before TRAI so as to offset the negative impact on

the subscribers of the hike in tariff. Consumers are somewhat confused due to

the rapid developments.

With Arun Shourie in the hot seat, it is sincerely hoped that he would help

restore bring some sanity back by asking operators to behave responsibly in the

larger interest of consumers.

Sudesh Prasad