"There is a serious issue with the first and second cellular operators in the circles"

He has taken over as chairman of the Cellular Operators' Association of India (COAI) at a time when it's being attacked by the government for attacking the government and for its tendency to go to court on virtually everything the government proposes.

But Dilip Modi, 29, the new COAI chairman, is all set to mend ways with the government. Modi, who acquired an MBA from Imperial College, London, and a B.Tech from Brunel University in London, is also the CEO of Spice Telecom, a regional niche player that operates in the Punjab and Karnataka circles.

In his first interview after talking over as COAI chairman, Modi talks about his plans for resolving the telecom tangle.

Excerpts:

The COAI has been asking for a level playing field between cellular service companies and basic service ones because they were allowed to launch wireless in local loop (WLL) services and paid lower licence fees. But you are suggesting a different solution "� provide parity to first and second circle cellular service companies with fourth circle cellular service companies as well as metro operators. Why?

The fourth circle's licence fee has been used as a benchmark to arrive at some equity for basic service companies.

If that is the benchmark, let us use the same benchmark to provide equity to first and second circle cellular service companies which have paid substantially more than the fourth circle operator.

I don't know whether it will solve the problem, but at least it is a way forward. You are giving them some oxygen to move forward. It is a practical situation and only if we offer practical solutions can we move forward.

What are you suggesting?

The first and second circle cellular service companies paid a licence fee of Rs 5,406 crore while migrating to the (revenue sharing regime of) the National Telecom Policy (NTP) of 1999 (they also paid Rs 1,057 crore in interest).

Cellular service companies paid Rs 437 crore for a metro licence. Fourth circle cellular service companies have paid Rs 1,027 crore. There should be parity with what the fourth operator paid.

Will this solve the problems of global system for mobile (GSM) cellular service companies?

If the unified access regime is an attempt to solve the problems of the past, this is one issue that needs to be addressed. The structural inequity in which we find ourselves is circumstantial, not intentional.

Therefore we need to have a structural adjustment. The government has tried to do this in the case of basic service companies through the unified access migration package "� basic service companies that paid more than the fourth circle licence fee have been given a migration path and a sense of equity.

Why didn't you ask for parity for circle cellular operators earlier?

My honest answer is that I don't know why. It is being asked for now is because there is a genuine feeling that all the stakeholders want to clear the issues of the past and write on a clean slate to build a foundation for the future.

But why now? Is it because the government has now pushed through unified licensing?

What is wrong in looking for a solution? We are saying that the government has tried to move forward and clear the cobwebs of the past.

It has created a roadmap for the telecom future. What we are doing is to highlight a few issues which, if addressed, can make the roadmap clearer.

Do you think that the unified licensing regime is the way out?

Through the unified access regime, the government has tried to solve an issue that was hurting the system. Whether it was an attempt to legitimise what was difficult to enforce is another question.

But on total unification, there should be a healthy debate. We should keep the customer at the centre and look at what is needed to provide good quality affordable services and how unification can help that goal.

There were various suggestions, for instance, on including long distance services also in a unified licence "� after all, why should we create artificial barriers?

What is COAI's view on unified licensing?

We are in the process of consulting our members on the issue and will seek everyone's view on what they want to do.

So are you saying that the key problem that needs to be solved is to provide parity to first and second circle service companies?

There is a serious issue with cellular service companies in the circles. We don't want to raise a problem for the sake of raising a problem. We are focusing on an issue which should have been addressed.

But because it has not been addressed, it does not mean that it should not be addressed.

If the government decides to listen to your suggestion and compensate circle players, will you withdraw the cases that are pending in the courts?

That is not for me to say. My job is to protect the interests of the industry. I think litigation is always the result of unfortunate circumstances.

My understanding is that as far as the industry is concerned it wants to focus on business and not on litigation. But if circumstances lead to litigation, it is very difficult. It is a three-year- long battle and it did not start yesterday.

If the industry is given a fair opportunity to represent its issues and if they are addressed quickly, my feeling is that there would not be any reason for us to litigate for the sake of litigation.

It is, of course, not my decision. I am just the representative of a collective organisation, but at the end of the day we are not in the business of litigation, we are in the business of telecommunications.

For example, in a unified regime why should we have a separate COAI and ABTO (Association of Basic Telecom Operators)? Why have two associations? Those are issues on which the industry has to look at.

Have you already started formally talking on unifying the two associations?

Not yet, but these are thoughts we are sharing with you.

COAI has been perceived as being anti-government. The government has made its displeasure known numerous times on COAI's tough positions. Please comment.

We are in business to grow and to contribute to the growth of the business. We also see that the government has given tremendous importance to this sector. But it has been a tough learning curve for everyone "� for the industry and all the stakeholders, including the regulator and the government.

While going through this learning curve there have been areas of disagreement on the way forward. That may have created some level of discomfort with the various parties. But at the end of the day our common cause is the growth of teledensity.

I don't think there is anyone here who is trying to point fingers at one other. They all want to work hand in hand. We recognise that mistakes have been made but let those mistakes not be held against anyone.

What are these mistakes?

Whenever you go through a learning curve and whenever a sector opens up you are bound to come to areas where differences of opinion exist.

For example, the industry made a mistake in paying high entry fees. But there was a process followed at that time by the government. But we should not be held guilty for that mistake.

But COAI has been viewed as a group that has very strong views about the government.

I cannot speak for whatever has happened "� it is a tough learning curve. We can look back and see what we did wrong or right, but our main aim should be to move forward.

This industry has landed in problems and we are looking at the government as a big brother and saying, let's work together and solve these problems.

On the one hand you talk of resolving the problem with the government. On the other, you still have court cases challenging limited mobility. So isn't there a contradiction here?

We have to realise that a tremendous amount of capital has been deployed by the cellular services industry.

Given the amount at stake, various stakeholders will ensure that their interests are protected. This litigation has been going on for a long period of time and I see that as a process.

But if the problems are resolved, is there any reason for the litigation to continue?

If the industry is given a fair opportunity to get its issues addressed, we obviously will not want to litigate for the sake of litigation. You are in court because you are an aggrieved party.

So there is a reason for being there. Once these grievances are addressed, surely we would like to get on with life. Why would we go on litigating?

As an industry we are not against competition. What we are saying is, don't create inequity in the structure which can lead to unhealthy growth. There should be orderly growth.

If everyone has a fair chance to grow, why should anyone complain? We are not asking the government to protect us in the market. If the market decides that we should die, then it is our problem.

There should be parity with what the fourth operator paid

In a unified regime why should we have a separate COAI and ABTO? Why have two associations?

We recognise that mistakes have been made but let those mistakes not be held against anyone