The shift may mean a revenue loss to the government in the short run, but this is by no means a surrender to business; for it results in lower charges (as now proposed by Trai) for those using or accessing cell phones, with a consequent increase in business volume (and therefore in revenue to government). It follows that blocking the revenue-sharing regime will mean reverting to the high tariff regime that held down the growth of mobile telephony on the demand side and, on the supply side, eroded the viability of many service-providers.

The reductions in mobile tariffs make the consumer central to telecom development. This should be borne in mind by the Cellular Operators' Association of Indiawhich, Pavlovian fashion, has gone to town against the reductions proposed from November 1.

Trai wants to reduce monthly rentals for cell phones, the per minute outgoing call charge, and the pulse rate; it also wants a reduction in the call rate from a basic telephone to a mobile phone (the calling party pays) and in the charge to be passed on by the basic telecom operators to the terminating cellular network. Cellular operators consider the proposed tariffs and charges to be too low, but that is only a first reaction. Trai's proposals sharply reduce the user-cost difference between mobile and basic telephones, and thus increase the relative attractiveness of mobile phones.

This could lead to a spurt in the cellular network: volume growth will result in lower costs. COAI makes out as if the proposed tariffs will make its members go out of pocket. But note that the new tariffs and charges are claimed to be "cost-based" by Trai, warranted by the migration to revenue sharing. Trai has clarified that itscurrent proposals assume that revenue-sharing will be 15 per cent. But this proportion has been fixed as an interim measure. Should the final proportion be reduced, Trai will work out lower tariffs.

Trai's assertion that it will address "consumer welfare" underscores that licence fee minus equals welfare plus. Under the licence fee regime, Trai gave the impression that protecting the viability of new telecom operators was its sole concern. Stiff licence fees left it little room for manoeuvre. Things are different now. Trai has seized the opportunity to bring public interest to the fore. This stance should give it strength to iron out the differences between DoT and private telecom operators.