Contents - Connect-World

National Development
“TRAI was established to
regulate, oversee, and
promote competition
and growth in telecom.”
rights of way and telephone numbering
plans.
However, this body was tainted from
the start: not only was it rather weak
in the powers conferred on it by the
TRAI Act, it was also largely staffed
by officers on short-term deputation
from the DOT family — the very
organisations it was meant to oversee.
Yet, so blatant was DOTs intention
to rule the roost, that TRAI very
quickly got into a turf battle with the
DOT and MTNL. It stopped a DOT
bid to cash in the bank guarantees of
six cellular operators who had not
paid licence fees, and in 1998, it prevented
MTNL from entering the cellular
market and ruled DOTs
Internet policy invalid.
The government operators took the
matters to the Delhi High Court,
which ruled later that year that the
regulator did not have jurisdiction
over the DOTs licensing powers, and
threw open private entry into
Internet services.
The government attempted to clarify
the TRAIs function, but after the
High Court judgement, the TRAI was
left with a single thankless task, setting
tariffs.
various political stratagems to block
it.
Finally, in 2000, the government disbanded
the TRAI and appointed a
new body in its place, which it divested
of judicial powers. These were
handed over to a telecom disputes
settlement and appellate tribunal.
This was followed by a spate of
improvements in the competitive
environment. National and international
long distance services were
opened up to competition in 2002,
and the license conditions for basic
services improved. The Tatas and
Reliance came in with major investment
after this, based on CDMA
technology. There was a bitter dispute
with cellular telephony
providers, who felt that basic services
providers were able to offer more or
less an equivalent service, at far better
licence conditions and lengthy litigation
followed.
Finally, towards the end of 2003, a
unified licence was introduced, and
the dispute finally laid to rest. As a
consequence, "From a single operator
and the lowest tele-density in the
world we now have multiple operators,
several technologies, at least 30
pre and post-paid tariff packages, not
less than 300 models of handsets
cellular tariffs dropped by over 90
per cent since May 1999, a feat
unparalleled by any other sector or
industry."
India had 14.17 million mobile phone
subscribers at the end of May 2003,
102.8 per cent more than at the end
of the same month in 2002. The
number of mobile phone users is
expected to surge to 120 million by
2008, making the sector one of the
hottest markets for global telecom
majors facing low demand in
Western countries.
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Figure 2: A unified licence was finally
introduced in 2003.
Here too, it met controversy every
step of the way. It had court battles
with MTNL on tariff issues pertaining
to its mobile phone service, and
when it tried to reduce the subsidy
that long-distance services were providing
to local traffic, the DOT used
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