Setting aside a verdict of the Telecom Appellate Tribunal allowing basic operators to provide limited mobile services, the Supreme Court on Monday asked it to re-examine the issue while refusing to stay the expansion of the new service.

The court referred a policy allowing fixed-line firms to offer limited mobile services back to a telecom tribunal, but did not stop basic operators from offering limited mobile facilities in the interim period.

The three-judge Apex Court bench, headed by Chief Justice G B Pattanaik, gave its decision on a petition filed by the Indian cellular services industry that had sought the scrapping of the government policy introduced in January last year.

"We do not accept the contention of cellular operators to restrain fixed service providers from taking new subscribers on WLL-M as it will be detrimental to the consumer interest," the bench, also comprising Justice H K Sema and Justice S B Sinha, said.

Mobile operators petitioned the court after the Telecom Regulatory Authority of India and the Telecom Disputes and Settlement Appellate Tribunal dismissed their plea.

"The case is remitted back to the tribunal for reconsideration," the court said in its judgment.

Abhishek Singhvi, counsel for basic telephone operators, told reporters the judgment meant fixed-line phone firms could continue to offer limited mobile services in the interim period and the final decision would be taken by the tribunal.

"While remitting the matter to the TDSAT for a decision, the Supreme Court has explicitly rejected the repeated and specific requests of the cellular operators to stay in any manner the provision of WLL mobility services," he said.

The controversial policy allows basic phone operators to offer Code Division Multiple Access-based limited-mobility services using wireless in local loop technology at cheaper rates than those charged by mobile firms using Global System for Mobile Communications technology.

The loss-making cellular industry had said limited radius services gave basic operators an edge in winning customers in India's nascent telecom sector which has a penetration level of just four phones per 100 people versus a global average of 15.

Cellular firms had fought the introduction of WLL on the ground that the government's move made a mockery of the terms under which mobile companies paid hefty license fees.

There are five fixed-line telephone firms, including state-owned Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd, that offer limited radius service to more than 500,000 users.

Cellular firms that compete with companies offering limited mobility services include Bharti Tele-Ventures Ltd -- partly owned by Singapore Telecommunications Ltd -- the mobile unit of Hutchison Whampoa conglomerate and the unlisted Idea Cellular Ltd.

India had 9.73 million mobile phone users at the end of November and analysts expect this number to grow to 12 million by March 2003 and 120 million by 2008.

Additional inputs: PTI