In a recent interview, Dr J.S. Sarma, chairman, Telecom Regulatory Authority of India (TRAI) spoke about the achievements of the telecom sector, the unresolved challenges and the way forward. Excerpts…
How do you see the dynamics of the telecom market changing after the rollout of 3G and broadband wireless access (BWA) services?
Currently, the number of broadband subscribers using wireline technology is only 9.45 million. We are lagging with regard to broadband growth. Increasing broadband penetration will have a positive impact on the telecom market.
The rollout of 3G and BWA services will facilitate broadband growth at a much faster pace. With four to five operators in each service area for 3G services and three operators for BWA services, there will be enough competition in the market to make wireless broadband services affordable. It is expected that the prices of 3G/BWA-compatible handsets will come down in the near future with the expected economies of scale for device manufacturers.
What is the most crucial gap in the Indian telecom regulation?
TRAI has the power to frame regulations pertaining to the quality of service, terms of interconnection and tariff-related matters. However, it cannot impose penalties on defaulting operators. As a result, the proper implementation of regulations is a challenge. There is a need to empower TRAI by enabling it to impose penalties.
How has TRAI?s performance been during your tenure so far?
TRAI has played a significant role in the growth of both the Indian telecom sector and the Indian broadcasting industry. During the past year, TRAI has focused on the vital aspects of these sectors. Some of the initiatives by TRAI include: regulations on mobile number portability (MNP) in September 2009 ? TRAI laid down the basic structure of MNP, setting a four-day time limit for porting to be carried out; regulations on MNP pertaining to per-port transaction charges ? dipping and porting charges in November 2009: TRAI fixed Rs 19 as per-port charge, making porting very easy and within the reach of the common man; recommendations on spectrum management and licensing framework in May 2010 ? laying down the framework for spectrum management in the country; recommendations on issues relating to mobile TV services; recommendations on the numbering scheme for telecommunications.
In addition to the above, TRAI has floated consultation papers on the national broadband plan, the review of unsolicited commercial regulations in telecom and the review of measures to protect consumer interests.
What has been the most noteworthy achievement of the telecom sector in the past one year? What has been its biggest disappointment?
The telecom sector in India continues to register a remarkable growth in mobile telephony with a net monthly addition of 18 million lines. The sector contributed 2.69 per cent to India?s GDP in 2009-10 and is expected to contribute 5.4 per cent to the GDP in 2010-11.
The most noteworthy achievement of the sector in the past year has been the successful completion of the 3G and BWA spectrum auctions. It is expected that in the next six to eight months, Indian consumers will be able to avail of various data-based applications provided through International Mobile Telecommunications (IMT).
Another major development has been the introduction of per-second billing. This has brought down the overall call charges and has enabled individuals to pay for the actual duration of the call. The biggest disappointment has been the non-implementation of MNP services in the country. Also, rural teledensity, currently at 24.29 per cent, continues to lag behind the urban teledensity of 120 per cent (as of March 2010).
What are TRAI?s short-term, medium-term and long-term priorities for the sector?
The primary objectives of TRAI are to ensure transparency in decision-making and provide consumers with adequate choice, affordable tariffs as well as better quality of service.
Short-term priority
Formulating an effective framework for unsolicited commercial communications; ensuring effective spectrum management; implementation of MNP; establishing an effective consumer grievance monitoring system; enacting a national broadband plan for broadband growth; promoting the domestic telecom equipment manufacturing industry; reviewing the numbering plan; and reviewing interconnection usage charges.
Medium-term priority
Enhancing transparency with regard to providing services including value-added services (VAS), billing and charging; refarming of 800 MHz and 900 MHz spectrum; recommending the introduction of IMT-advanced services; promoting green telecom technologies.
Long-term priority
Ensuring a predictive, stable and supportive regulatory framework to attract long-term investments in the sector; audit of available spectrum with government agencies and spectrum refarming; facilitating a smooth migration to next-generation networks (NGNs); implementing an internet protocol-based interconnection regime and a new model for interconnection usage charges.
What initiatives are being planned by the government with regard to rural telephony?
The creation of infrastructure in rural areas will be expensive. Initially, the rate of return on investments may not fit the business model of various service providers. Therefore, the most important tasks are to create telecom infrastructure in rural and far-flung areas, encourage service providers to roll out services in these areas, facilitate infrastructure sharing to reduce rollout costs and provide good quality and affordable telecom services to the consumer.
Approximately 8,000 towers are in the process of being erected in rural and remote areas, with the subsidy being provided by the Universal Service Obligation Fund in Phase I. In addition, 11,000 towers will be erected during Phase II. These towers will facilitate the rollout of mobile and BWA services in most of the villages.
The availability of power supply is another major constraint. The frequent power supply failures in rural areas increase operational costs for service providers. The use of non-conventional sources of energy needs to be encouraged to overcome such problems.
What does the future hold for the telecom sector?
Increasing digitisation of content, miniaturisation of devices, higher processing power of devices and the availability of enormous memory are leading to convergence. The convergence of networks, platforms and the sector is becoming a common phenomenon. Convergence brings in great advantages, namely, convenience, innovation, variety and competition. It results in significantly altering the traditional communications market and existing business models.
The robust growth of the sector will continue and we expect to have 1,000 million telecom subscribers by 2014. Wireless services will continue to drive the growth. The contribution from rural areas will be higher. With the increased rollout of 3G services, we may also witness a change in customer preference. Growing consumer requirements and awareness along with greater affordability have been changing the demand pattern in the bandwidth segment. Busy lifestyles, technological innovations, the increasing popularity of online entertainment, and the need to keep in touch constantly have boosted the demand for internet services. The younger generation is fascinated by the new technologies and services on offer. The demand for data services will continue to increase and as a result, future services will become more data-centric. This will also drive the uptake of smart devices.
In the future, consolidation in the market through mergers and acquisitions may be required. The future availability of 3G and BWA services will significantly increase the number of wireless broadband subscribers, content providers and VAS providers.
What will be the key growth drivers for the sector in the coming years?
With technological innovations and compelling personalised applications, location-based services will be more popular in the future and will carry a good market segment. Services such as grid computing, cloud computing, remote surveillance, fleet management, telematics and retail supply chain will be supported on the mobile platform. The demand for these services may lead to future growth of the sector. Mobile VAS such as mobile TV, mobile banking and mobile-governance will witness a higher demand in the future.
Implementation of new technologies such as NGN, 3G and BWA will enable subscribers to avail of advanced telecom services with a better quality at affordable prices.
The rapid developments in the telecom sector have resulted in increased responsibilities for the regulator, operator as well as the subscriber. While creating a conducive environment for the growth of telecom services and ensuring a good quality of services for subscribers at affordable prices is the responsibility of the regulator, operators also need to be extra sensitive to the subscribers? requirements and ensure better quality of services in the future.
