The government has been proactive in its efforts to enhance efficiency and promote optimal resource utilisation within the telecom sector. The Telecom Regulatory Authority of India (TRAI) has been actively working to improve spectrum utilisation and facilitate infrastructure sharing to foster sectoral growth. To this end, TRAI issued a consultation paper on January 13, 2023, aiming to address various challenges in the telecom landscape. These challenges include infrastructure sharing, connectivity issues in remote areas, inter-band spectrum sharing among service providers, authorised shared access (ASA) of spectrum and spectrum leasing. Following a thorough consultation process, TRAI has released its recommendations on “Telecommunication Infrastructure Sharing, Spectrum Sharing and Spectrum Leasing,” addressing key concerns regarding infrastructure, spectrum allocation and leasing within the telecom industry.

The key features of these recommendations are as follows…

Infrastructure sharing

The current framework for telecommunication service licensing in India distinguishes between active and passive infrastructure sharing. Active infrastructure sharing refers to the sharing of electronic infrastructure of the telecommunication network, while passive infrastructure sharing refers to the sharing of non-electronic infrastructure such as towers, poles, ducts and premises.

Allowing the sharing of passive infrastructure among all telecommunication service providers (TSPs) can bring many benefits. It can save costs, make better use of resources and improve the coverage and capacity of the network. Additionally, it can help reduce the environmental impact, making it more sustainable and beneficial for society at large.

To this end, TRAI recommends that telecommunication service licensees be allowed to share passive infrastructure, such as buildings, towers, electrical equipment (such as batteries and power plants), dark fibre, duct space and right of way, which are owned, established and operated by them under their respective licences, with all types of telecommunication service licensees. In addition, sharing of the lawful interception system held by a licensee company with other licensee companies may be allowed with the permission of the Department of Telecommunications (DoT) on a case-by-case basis, provided there are no security concerns. Furthermore, DoT is advised to review all telecom licenses to ensure they include clear rules for both passive and active infrastructure sharing.

Need for mandatory sharing of government funded infrastructure

In rural and remote areas, offering telecom services can be quite challenging. It is more expensive due to higher capital costs, lower population density, low income and a lack of commercial activity. Thus, normal market forces alone cannot ensure that these areas are adequately served by the telecom sector.

As a solution, TRAI recommends that in future projects of the Universal Service Obligation Fund (USOF) under the Indian Telegraph Act, 1885 (or Digital Bharat Nidhi under the Indian Telecommunications Act, 2023), DoT should include a provision in the agreement with the universal service provider (USP) to enable the sharing of passive infrastructure laid under a project with at least two other TSPs in a transparent and non-discriminatory manner. Meanwhile, in the assigned projects of the USOF, DoT should similarly explore the feasibility of issuing instructions to such USPs, stipulating that the USP shall not refuse to share the passive infrastructure laid under a project with at least two other TSPs.

TRAI also recommends to DoT to make quick decisions to support the development of shared digital connectivity infrastructure (passive and active) in underserved areas.

Connectivity issues in remote and far-flung areas

In remote and far-flung areas of the country, users often face the problem of inadequate telecom coverage. DoT had asked TRAI to consider including provisions in licence agreements that would require TSPs to offer mandatory roaming arrangements in remote areas of hill states, left-wing extremism (LWE)-affected areas and along international borders.

However, TRAI states that mandatory roaming may take away incentives for TSPs to build telecommunication infrastructure, such as first mover advantage, having a competitive advantage with a larger network footprint and offering better quality of service. Consequently, this could discourage TSPs from investing in building telecom infrastructure in remote and far-flung areas.

TRAI recommends that TSPs that have built mobile network infrastructure in remote areas, with help from the government under the USOF, be mandated to allow roaming to other TSPs on their network in such areas, initially for a period of three years.

Inter-band spectrum sharing

As the demand for spectrum continues to grow, it is crucial to ensure that it is used efficiently and optimally. Spectrum sharing is a way for TSPs to expand their network capacities in areas where there is high demand for spectrum. There are two types of spectrum sharing: within the same band (intra-band) and between different bands (inter-band).

On this note, TRAI recommends that inter-band access spectrum sharing in a licensed service area (LSA) should be restricted within frequency bands falling under defined spectrum band categories, including sub-1 GHz bands (600 MHz, 700 MHz, 800 MHz and 900 MHz bands), 1800 MHz and 2100 MHz bands, 2300 MHz, 2500 MHz and 3300-3670 MHz bands, 26 GHz band, and the newly identified bands 37-37.5 GHz, 37.5-40 GHz and 42.5-43.5 GHz.

Additionally, TRAI added that inter-band spectrum sharing should only be allowed after a lock-in period of two years from the date of acquisition of the spectrum. TSPs involved in inter-band spectrum sharing must pay a non-refundable fee to the government. Furthermore, TRAI will monitor the developments in the wireless access services segment and review its recommendations as needed.

ASA of spectrum

In India, certain chunks of spectrum are set aside for government use and other services, but they are not always used as efficiently as they could be. With the rise in digitalisation and the demand for data-heavy applications and internet of things solutions, it may be necessary to explore the feasibility of ASA of spectrum. This would allow the spectrum assigned to government agencies on a primary basis to be used by access service providers on a secondary basis.

Considering this, TRAI recommends that DoT should consider implementing ASA-based spectrum sharing in India. This would enable access service providers to use the spectrum assigned to government agencies or other non-TSPs in globally harmonised spectrum bands for international mobile telecommunications services as secondary users. This means that telcos could use the spectrum when the government is not using it. However, before implementing this, TRAI suggests conducting field trials supervised by DoT to see how well it works. Based on the results, a detailed regulatory framework for ASA-based spectrum sharing between access service providers can be developed.

Spectrum leasing

The frequency spectrum is a limited natural resource and gets wasted when it is not utilised optimally and efficiently. Currently, DoT assigns access spectrum to eligible entities through an auction process for a period of 20 years on an LSA-basis. This spectrum is a crucial resource for the delivery of wireless access services. Spectrum leasing can increase the efficient use of spectrum.

As of now, the leasing of access spectrum to other TSPs is not permitted in India. However, it can be a cost-effective way to expand service offerings and increase coverage area. To make adequate spectrum available for the new broadband era, one of the action plans is to further liberalise the spectrum sharing, leasing and trading regime.

Thus, TRAI recommends that the leasing of access spectrum should be permitted among access service providers, subject to several terms and conditions applicable on the leasing of access spectrum. It also recommends that a licensee should be permitted to lease its frequency spectrum to another licensee only after a lock-in period of two years from the date of acquisition of the spectrum. Such a condition will also discourage a TSP from acquiring
access spectrum with spectrum leasing as the key objective.

There should also be a limit on how much spectrum a provider can lease, as well as fee payable to the government for leasing. Thus, TRAI recommends that a service provider should not be permitted to lease more than 50 per cent of its qualifying spectrum holding in a frequency band in an LSA. Additionally, the TSP taking spectrum on lease should pay the government a non-refundable leasing fee of 1 per cent of the transaction amount of spectrum leasing.

Bottomline

With the release of its comprehensive recommendations, TRAI has charted a course towards greater efficiency and competitiveness in the telecom sector. These recommendations will be presented to the Digital Communications Commission for implementation, and once implemented, they will help TSPs usher in greater cost efficiencies and improve time to market. Overall, these will lead to a more competitive market that is more efficient in
its resource utilisation while offering better coverage and higher service quality
to customers.

Niha