Once again, Calling Party Pays or CPP for cellular services is gaining momentum with the release of the consultation paper on CPP for mobile services by the Telecom Regulatory Authority of India on 23rd May 2001. The regulator has already accepted comments from all the concerned parties and is in the process of conducting an open house to get an insight on CPP from the basic service provider, the cellular service provider, and the basic telephony subscriber. The TRAI will come out with the "CPP Tariff Order" at a later stage after weighing all the pros and cons from the concerned parties.

A lot of discussion is going on betweeen service providers (basic as well as cellular) whether CPP should be implemented or whether MPP (mobile party pays) should be continued. A second thought is whether to let the market forces decide among themselves whether they want to go for CPP or MPP depending upon their convenience. And without any obligation on the operator.

In the CPP regime, the person initiating the call pays for the entire cost of the call. If a call is made between mobile users, then the person making the call pays for the entire cost of the call. In the same way if a call is made from a fixed network to a mobile susbcriber, then the user on the fixed network pays for the entire cost of the call. In the MPP environment, which is presently valid in India, the cellphone user pays for the outgoing calls and also pays for all incoming calls that he or she receives. In the third type, the choice is left to the cellular service providers without any obligation on the operator to opt for CPP or MPP or both, depending upon the market in which they operate and the type of service they plan to provide.

Before implementing CPP in the country, the regulator has to ensure that our exchanges are CPP ready. Secondly, the TRAI has to come out with an effective mechanism regarding the charging of cellular calls originating from a basic telephone. Thirdly, the regulator should also ensure that CPP awareness is created in the country as the subscriber has to pay a differential tariff for basic calls and cellular calls originating from a basic telephone.

Network Upgradation

If CPP is implemented, the new private basic service providers like Bharti Telenet in Madhya Pradesh, Hughes Tele.com in Maharashtra, Tata Teleservices in Andhra Pradesh, HFCL Infotel in Punjab, and Shyam Telelink in Rajasthan need not have to worry much as their network is CPP ready. This is because they have started their operations recently and have gone for a digital switch. But the incumbent operator, Bharat Sanchar Nigam Limited (BSNL), has to do a lot of groundwork before the exchanges become CPP-ready.

Some statistics which speak about the scale of operation that the incumbent has to upgrade: BSNL has around 32,000 switches, 2,646 short distance charging areas (SDCA), and 321 long distance charging areas (LDCA). But only 130 LDCAs are CPP ready i.e they are CCS7 ready and have CLIP (calling line identification) facility in their network.

To make all the exchanges CPP ready, the incumbent has to incur a huge monetary expenditure as some of the exchanges will require a software upgradation, metering capability upgradation, and in some cases where there are E10B or analog exchanges, one has to replace the entire exchange with a new digital exchange. It is expected that the total expenditure for making the exchanges CPP ready will be around Rs 5,000 – Rs 6,000 crore.

Considering the enormity of the task, it is expected that the entire process will take somewhere between 1.5 to two years depending upon the scale of operation. In this situation, the regulator has to decide who is going to bear the upgradation cost for making the network CPP ready before implementing CPP in the country.

Charging Scheme

With the implementation of CPP, the basic telephony users have to pay more for making a call to a mobile number than calling a landline number. But the basic question is how to charge calls which originate in a basic network and terminate in a cellular network? As mobile calls from the basic network will be charged premium in comparison to the landline calls, the basic service provider has to install a mechanism whereas all cellular numbers will be charged a premium.

So, if one has to charge a premium it is not possible through a local call as there is only one tariff which is prevalent in the entire network. To charge premium, the basic service provider has no other option but to provide a zero dialing facility for calls from a basic telephone, terminating on a mobile phone.

Once the cellular call comes under zero dialing facility, the cellular service providers will be the first to object as it will lead to a drop in cellular calls. As, according to one statistic, around 65 percent of calls to mobile network originate from a basic telephone. With zero dailling facility for mobile calls most offices, hotels, and other public places will place some kind of restriction on the calling of mobile phones. This is going to reduce the calls to cellular phones quite substantially, as the majority of the cellular calls occur during peak hours.

As there would be a premium charged for calls to the mobile number, people will be very choosy about making calls to a cellular number and it is estimated that there will be a dip in the number of calls by as much as 30 percent. Since most of the phones in India are not STD/ISD activated, the regulator would be creating an artificial barrier by not letting calls from these phones be terminated to a cellular number, and creating inconvenience to the users who have to go to the STD/ISD booth for making a call to a mobile number.

Worldwide, due to technical difficulties, roaming, international calls, and calls from PCOs are excluded from the purview of the CPP regime. The regulator has to see whether they want to still continue with the same or charge a premium for roaming calls, international calls, and calls originating from coin based PCOs that are present in the country. Even in STD calls it is very difficult to implement CPP as the sharing of revenue becomes very difficult when there are multiple operators.

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A lot of education has to be done to intimate the basic subscribers that one has to pay a premium tariff for making a call to a mobile phone. This is so that there is no confusion among the general public that the service provider or PCO owner is charging a premium service for all calls originating from a basic telephone and terminating on a mobile phone. It is estimated that a minimum of Rs 100 crore will be required to initmate the around 3.7 crores telephone users about the change in tariff. So, the question is who is going to pay for the advertisement or intimation cost. Since the incumbent operator has around 99 percent market share, the entire cost will have to be shared by MTNL and BSNL.

The regulator will really have a tough time implementing CPP with the available constraints in terms of network upgradation and charging scheme. But issues like interconnect and tariff will also create roadblocks for CPP implementation in the country.

Pravin Prashant