Introduction of the Unified Access (Basic and Cellular) Services License

The Government of India , on 11th November 2003, in furtherance of the spirit of the National Telecom Policy 1999 and in the greater consumer interest, issued guidelines for a Unified Access (Basic and Cellular) Services License ('UASL') Regime. The Government opened up the telecommunications sector to private companies on the promise that its action would lay the ground for greater penetration of telecommunication facilities and that it would lower costs. Licenses were granted to cellular operators ('CO') and Basic Service Operators ('BSO') through an auction process .The COs provided mobile telephony using Global System for Mobile Communications ('GSM') technology. The Government introduced the National Telecom Policy of 1999 which migrated the old model of licensing fees to a revenue sharing model between the Government and the COs . The BSOs only paid an entry fee. With the advent of Wireless in Local Loop ('WLL') technology the government permitted BSOs, under their existing licenses to offer WLL services to provide the 'last mile' connection . The BSOs went a step further and used Code Division Multiple Access ('CDMA') technology to provide mobile telephone services at a nominal local telephone call cost within a limited area called the Short Distance Charging Area ('SDCA') which was affordable by the common man. The Government consented to this service model. However, the BSOs were only permitted , under the license, to offer limited mobility service and not roaming. Some BSOs used the call forwarding technology to provide roaming services. This was objected to by the COs and all this led to litigation between the various players in the telecom space including the government.

The COs went in appeal from the decision of Telecom Dispute Settlement Appellate Tribunal ('TDSAT'), which had upheld the right of the BSOs to provide limited mobility services within the SDCA but restrained them from providing roaming facilities. By this appeal the COs also aimed at getting a stay on the implementation of UASL as they deemed that the BSOs were getting an unfair advantage by being permitted to migrate to the new regime whereas the COs had invested huge amounts in obtaining their licenses, but were unable to do so. This litigation is still pending before the Supreme Court of India. Since no stay was granted the government went ahead and introduced the UASL regime guidelines.

Some of the salient features of these guidelines include:

• Basic Service Operators would now have the option to continue within the present licensing regime or migrate to the UASL.

• Upon migrating to UASL, the license fee, service area, rollout obligations and performance bank guarantee shall be in unison with the CMSPs.

• The service providers migrating to UASL, shall continue to provide their wireless services in already allocated/contracted spectrums i.e. no additional spectrum will be allocated.

• Under the UASL, the CMSPs are also given permission to carry out limited mobility facility at appropriate tarrifs through concepts such as home-zone operations etc.

• Choice of technology is left to the UASL providers discretion.

• No additional fee for CMSP to move to UASL regime.

• BSOs will be charged an additional entry fee BSOs that have been providing mobility by exceeding the mandate of their existing licenses shall, in addition to the entry fee, retrospectively pay a penal interest @ 5% on the entry fee.

• No entry fee for existing BSOs where CMSPs have not yet bid.

• BSOs not wanting to migrate would only be required pay the additional fee for offering WLL and will have to confine mobility within the SDCA.

• BSOs migrating to UASL shall have to provide its subscribers an option to choose between full mobility and limited mobility services.

As per the recommendations proposed by Telecom Regulatory Authority of India ('TRAI'), Basic and Cellular Services shall be unified within the service area. All new licenses shall be in the category of the UASL.

In our view, with the ushering in of the UASL regime and major telecom providers such as Reliance Infocom and Tata Teleservices migrating to the UASL, the Supreme Court will in all probability uphold this new regime with the aim of fostering a litigious free telecom sector and promoting healthy competition and growth.

Source: Guidelines issued by the Department of Telecommunications.