The high court also issued notices to the department of telecommunication and MTNL on a petition filed by Cellular Operators Association of India (COAI), and fixed September 18 for final disposal of the case.

The association has sought quashing of the amendment to the MTNL license which allowed it to enter cellular telephony in Delhi and Mumbai.

The association has argued in its petition that MTNL was granted a cellular licence without any tender process. It was completely arbitrary and the centre had indulged in gross abuse of powers, resulting in procedural impropriety, irrationality and illegality.

The cellular operators forum has contended that the licence was also in violation of the National Telecom Policy of 1994 and threatened the very existence of private operators.

According to theassociation, private operators will end up competing with MTNL without a level-playing field. It fears that MTNL would utilise interconnect revenues it earns from four cellular operators in Delhi and Mumbai, which was Rs 136 crore in 1997-98, to subsidise its own cellular service.

The petition points out that MTNL will be able to offer more attractive packages by bundling both cellular and basic services, which private operators cannot do because they have no presence in the basic services.

The association has also questioned the logic of MTNL investing Rs 1,070 crore in its proposal cellular venture in Delhi and Mumbai at a time when spare capacity was available in networks of private cellular operators.

The association has stated that this investment by MTNL was uncalled for as the country's foreign exchange reserves were already under pressure owing to economic sanctions imposed by certain countries following the nuclear tests. The counsel for COAI said that the petition was not an appeal against theearlier high court order a few days ago which paved the way for MTNL's entry into cellular telephony. The petition also does not raise the issue of jurisdiction of the Telecom Regulatory Authority of India (TRAI).

INSIGHT
Telephony entry may be stalled

In addition to the recent writ petition arguing that the grant of cellular license to MTNL is invalid, the recent judgement slashing TRAI's jurisdiction and paving the way for MTNL's entry into cellular service had also kept the issue pertaining to whether MTNL was an existing cellular provider or not open. MTNL has been stating it did not need a license because it was an existing cellular provider as was providing mobile trunk (car phone) services in the past. Further, the other argument against MTNL's entry into cellular services is that Clause 13A of the agreement between DoT and the cellular operators specifies that only the licensor (DoT) could enter cellular services as the third operator. There is thus a possibility that MTNL'sstatus as an existing player might not be acknowledged and its entry into cellular services stalled.