Tata Tele shelves capex plans

Tata Teleservices Ltd (TTSL) is reconsidering its earlier announced capital expenditure plans of investing Rs 2,500 crore in fixed wireless phone (FWP) services, citing unfair competition and a lack of clarity in telecom policies.

The investment was to be made over a three year-period for furthering its FWP services, which is being operated under Walky brandname.

TTSL would have to take a "wait and watch" approach and further investments would be made only after analysing the present situation, sources close to the developments said.

Last week, TTSL also informed its lenders of the move to "reconsider" the capex and sought the cancellation of the loans the company needed for its capex plans.

However, neither the names of the borrowers nor the amount the company was intending to borrow was available. TTSL is one of the three FWP operators and has around 3.6 million subscribers in the country, with operations in 20 circles. The company had already invested over Rs 13,500 crore.

Earlier, the Cellular Operators Association of India (COAI) and Bharat Sanchar Nigam Ltd (BSNL) had moved the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), stating that TTSL's services should be considered as Wireless in Local Loop (Mobile), instead of WLL (Fixedline).

They had also alleged in the filing that some of the subscribers were using Walky as a limited mobile, meaning that the users carry it on person like a mobile phone.

COAI and BSNL had also stated that TTSL's brandname Walky was a misnomer.

TTSL, in its reply, had admitted that there would be a small percentage of subscribers who may be using FWPs outside their premises of installation. The company also said that it would be "unfair to penalise all subscribers", as users would have to pay a higher levy if the services are categorised under fixed mobile.

The company also said that this was against the National Telecom Policy of 1999 (NTP 1999), which had categorised FWP as a WLL(F) service and not a WLL(M) service.

A conversion of FWP into WLL(M) would also bring it under the Access Deficit Charges (ADC) regime.

ADC is a levy paid by other operators to BSNL for rolling out telecom services in the urban, semi-urban and rural areas.

A recent decision by the Telecom Regulatory Authority of India (TRAI) and the Department of Telecommunications (DoT) to bring FWP services under the WLL(M) category would also hamper Walky services, sources said. When contacted, a company spokesperson declined to comment on the issue.

TDSAT is slated to hear the petition filed by COAI and BSNL on Tuesday, while a verdict by the second week of August.