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Highlights: TRAI’s supplementary open house discussion on proliferation of broadband

Telecom Regulatory Authority of India

The Telecom Regulatory Authority of India (TRAI) held an Open House Discussion on its Supplementary Consultation Paper on a Roadmap to Promote Broadband Connectivity and Enhanced Broadband Speed on June 23 (read the paper here). This article presents highlights of stakeholders’ views based on notes from the session. Quotes are not verbatim and don’t necessarily represent all the views of each stakeholder. 

Mahesh Uppal, Telecom Consultant: Direct Benefit Transfers are very useful devices when there are no supply-side constraints and are essential in improving demand for schooling or health. With telecom, though, the need is an incentive for investment in a network that doesn’t exist yet. As such, the incentive should go to people who are installing the infrastructure.

Such a subsidy has to be broken into smaller parts, to be disbursed as and when key milestones in the rollout of the infrastructure are met. Additionally, operators should be allowed to deduct such subsidy payments from future license fee payments, instead of waiting for disbursal from the government.

Such a subsidy, one should keep in mind, cannot be a net positive for the government. The government is paying out of its bucket to achieve a public policy goal. The concerns of the DoT on the arbitrage of license fees reveal a fear of not getting due fees. Our existing license framework provides perverse incentives for the expansion of access and other such goals. We need to overhaul the licensing system to permit the right incentives for efficiency.

TV Ramachandran, Broadband India Forum: India doesn’t want to be just an ICT economy, but an ICT superpower. For such a goal, a 3% fixed-line broadband (FLB) penetration is not enough, as we have a lot of catching up to do with markets like China and Korea. Even with our mobile broadband penetration, there are limits to the technology; we need a minimum penetration of FLB in the country to catch up, several times more than the status quo. Man cannot live by bread alone, as the Bible says; similarly, India can’t live off mobile broadband alone. We cannot have ultra-reliable delivery with mobile broadband, as studies in the US and Korea are already demonstrating.

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I disagree with Mr. Uppal on this point, as I believe that we need both demand and supply-side incentives to proliferate FLB. As for arbitrage of such incentives, the government has systems in place to audit several aspects of telecom operators’ compliance, such as with radiation checks.

The incentives are essential, as a 10% increase in internet traffic leads to a humongous 3.3% increase in GDP. For the right of way, we need free access to street furniture and laying fibre. With fibre, we’re not taking any value away, we’re simply temporarily disturbing land to lay fibre, and restoring the infrastructure to how it was before.

TR Dua, Director General, Tower and Infrastructure Providers Association: The 2016 Right of Way Rules do not take into account using street furniture for providing access; an amendment to that effect may be in order. In general, coverage of telecom is harder to accomplish due to limited places to build small cells; government assets such as parks, buildings, and metro pillars should be mandatorily used for the installation of such equipment. Presently, there are too many restrictions on telecom infrastructure.

Ajay Mehta, Vice President – TRAI Policy and Operations, Vodafone Idea: Since this consultation process started in 2014, the factual matrix has changed significantly. Mobile broadband has grown by almost six times, and almost 97% of broadband users are mobile. This segment should be given worthwhile treatment as well. Dependence on FLB is surely going to decrease with 5G; if that is the case, incentives should be given to the entire broadband sector, not just fixed-line broadband.

The mobile broadband industry is going through an enormous period of stress, and the consultation on a floor price for mobile tariffs needs to move ahead. If nothing is done in this regard, it could have a drastic effect later.

On incentives, the industry needs a gestation time. At least ten years should be provided for incentives to show a return so that effective results can come out and customers can benefit.

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G. Sankaranarayana, CEO & MD, Asianet Satellite Communications: Cable TV providers can double as broadband providers. Penetration of cable providers already exceeds 200 million. For penetration of broadband, we need to get rid of speed breakers like excessive license fees; we have achieved only 3% penetration in 21 years of this industry existing. We need better access with Resident Welfare Associations and general ease of doing business.

Rahul Vatts, Chief Regulatory Officer, Bharti Airtel: There are three main problems with the sector today: an unviable financial model with limited revenues even in urban areas, Right of Way issues with rolling out infrastructure, and the maintenance and upkeep of existing infrastructure. We need to reduce costs for the industry such as spectrum, import duties on equipment, and a non-discriminatory license fee structure and incentives. The 18% GST on FLB can be rethought, and that in itself will translate into a DBT for the customer by reducing their outgo.

Another problem is the restoration charges for building infrastructure levied by local governments. For utilities like gas and power, there are concessions made, but for broadband, this is not the case usually.

Ravi Gandhi, Chief of Public Policy & Regulatory, Reliance Retail: Permissions are a major problem, as we are charged exorbitant amounts of money for places where the population density does not make up for the fees we pay to install equipment. Municipal charges for installation on private property need to be done away with. RWAs cause a lot of issues as well, so it’s important that the building code be updated to require authorisation of telecom infrastructure. The license fee has to be reduced to alleviate the overall cost structure of telecom operators.

Telecom operators should be given the flexibility to determine where to roll out services depending on the demand.

Rajesh Chharia, President, Internet Service Providers Association of India: [translated from Hindi] Everyone needs connectivity that caters to all needs, and fixed-line broadband is the only technology that can fulfil this need. Direct and indirect incentives have been discussed. Subsidies are on the decline; we need a level playing field. Broadband has a 35% tax in total. There are license fees, GST, RoW charges, restoration charges… If we are able to adjust the license fee, the cost of broadband will lower automatically.

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The cost of broadband is not much, but the services we’re providing on top of that, phone, internet, IPTV, security… Those prices are bundles and customers are buying them. If a licensed service provider wants to bundle services, they should be facilitated. Because of this pandemic, employment has shifted everywhere, including in rural areas; connectivity and opportunities have followed. ISPs are in metros and rural areas.

We should not just try to look at FLB, we should look at the bundle. With 5G, there are just three or four operators who are eligible. If you include FLB ISP, we can make do with street furniture. Cable has been able to deal with those issues. Low-level cable operators are a one-man army. If we work on a street, we need security and a uniform policy. The central and state governments lack synchronisation. If you want anything done with telecom, the governments don’t recognise it, and there’s a hit to revenue.

Files keep moving, and work doesn’t happen. Policies have to be friendly and simple. Permissions should be granted automatically. Whatever you recommend, please make sure that recommendations are accepted on time. There are recommendations pending for years. TRAI and DoT need to synchronise so that TRAI recommendations are processed quickly.

Praveen Sharma, Vice President & Head, Regulatory Affairs, Tata Communications: Higher costs for FLB deployment has historically been a reason behind its lack of penetration as compared to mobile broadband. TRAI tried correcting this issue four-five years back, but this did not work. So we’re dependent on the local players to do it. The objective should be to increase overall internet penetration, and that includes Internet Leased Line bandwidth, which is enterprise grade.

Aroon Deep, MediaNama*: The need of the hour is a framework for non-profit ISPs in India. As broadband grows over the coming decade, underserved communities will inevitably demand more control over their connectivity, and they need to be given the means to do that. Whether that involves USOF disbursals, free peering with NIXI, or other such factors, can be fleshed out later. The need of the hour now is to create a framework where such arrangements are possible.

MediaNama participated in this discussion.

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I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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