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In a bid to take on cellular operators, Tata Teleservices has approached the Telecom Regulatory Authority of India for approval to offer short message services to its limited mobility customers.
Currently, basic firms are not allowed to offer SMS services, a monopoly enjoyed by cellular firms, though the code division multiple access technology enables them to do so.
Cellular companies, which are already reeling under massive losses, will receive a huge blow if TRAI allows Tata Teleservices to offer SMS, as it is a major source of revenue from value-added services.
The TRAI nod will also bridge the difference in the number of services offered by the two.
This apart, basic firms, which already offer free incoming calls and outgoing calls at Re 1.20 per three minutes, will be able to meet other challenges being imposed by cellular companies.
SMS services are already available to the 10 million mobile users at a cheaper rate (Re 1 in select cities, which is being raised to Rs 1.50 per SMS).
"This could have some impact on the pricing of SMS," analysts said.
If the government gives basic operators its nod to offer SMS, the main beneficiaries will be Tata Teleservices, Bharat Sanchar Nigam and Reliance Infocomm.
At present, the Tatas offer basic services in Andhra Pradesh and Tamil Nadu. Plans are afoot to unveil the services in New Delhi and Gujarat under the Tata Indicom brand name.
In Maharashtra, it has a presence through Hughes Tele.com, which has been renamed Tata Teleservices (Maharashtra).
As per the telecom regulation, basic firms are not even allowed to offer roaming services to their limited mobility users.
However, in order to circumvent the hurdles on roaming, basic users can forward calls from one place to another.
Meanwhile, Tata Teleservices is also upgrading its CDMA network to increase the voice capacity and data speed on offer for its wireless in local loop service users.
This will be mainly achieved by increasing the current IS 95A standard to CDMA2000-ixRTT standards that will enhance the data and voice capacity from 14.4 kbps to 153 kbps.