Ram Sewak Sharma, chairman, Telecom Regulatory Authority of India (TRAI)

Apart from formulating regulations for the industry, the Telecom Regulatory Authority of India (TRAI) has been active in aligning the industry’s aspirations with the government’s goals. In an interaction with tele.net, Ram Sewak Sharma, chairman, TRAI, shares his views about the telecom sector’s performance during the past one year, the key regulatory moves made by TRAI, the regulator’s position on the issue of call drops and net neutrality, and the future outlook for the sector. Excerpts…

How would you rate the perform­ance of the sector in 2015 in terms of regulatory experience and the resolution of various issues?

In March 2015, the spectrum auction was smoothly concluded, which helped the industry plan its growth. If you look at the telecom services sector from the availability-accessibility-aff­ord­ability-acceptability perspective, I would say the sector is doing reasonably well. This sector serves about 1.03 billion subscribers. The teledensity is about 81.4 per cent. Today, telecom services are ubiquitous and are consumed not only in the bustling streets of metropolises but also in the hinterland villages of the country. Efforts are being made to connect the unconnected. Mobile voice tariffs (at about Re 0.50 per minute) are one of the lowest in the world. In recent times, TRAI has taken some proactive steps towards improving the quality of service. In terms of revenue, the adjusted gross revenue (AGR) of the telecom services sector stood at Rs1.75 trillion in 2014-15. The growth rate of the sector has been reasonably good in the past two years. The AGR of the telecom services sector grew by 12.3 per cent during 2013-14 and by 11.3 per cent during 2014-15. There is a lot that is yet to be achieved but, generally speaking, the sector’s performance is satisfactory.

What were the key regulatory moves by TRAI in 2015 and what has been their impact so far?

On the regulatory side, we took some decisions from the consumer benefit perspective. These included issuing regulations on obtaining and using data services provided by telecom service providers (TSPs) and on the interconnection charges to be paid by various telecom networks. Call drops was another issue on which we came out with a regulation and which, from a regulatory perspective, is very important for consu­mers. We are closely monitoring the actual, on-the-street, performance of various telecom net­works through drive tests. We are audit­ing them on various perform­ance pa­r­a­­­meters and we have al­rea­dy iss­u­ed the regulation on com­pen­sation for call drops. These steps will help reduce call drops and improve the quality of service.

For TRAI, the big issue was the debate on net neutrality. Although we did not start the debate, the public response to our consultations on over-the-top (OTT) services (which are being provided by riding on TSP networks) and differential pricing of data services turned it into a debate on internet freedom.

How is TRAI dealing with the growing concerns regarding call drops? Is the industry (oper­ators, consumers, the regulator) ready to implement the compensation mechanism for call drops?

In the past one year, consumers have been raising the issue of call drops on various platforms; they have been complaining that their experience with voice calls has deteriorated. In order to devise a framework to protect the interests of consu­mers, TRAI initiated a consultation process in September 2015. Based on the comments of stakeholders in the consultation process and further analysis, the authority came to the conclusion that call drops are instances of deficiency in service delivery on the part of mobile service providers and cause inconvenience to consumers. Hence, it would be appropriate to put in place a mechanism for compensating consumers for dropped calls. Accordingly, in October 2015, the authority laid down the Telecom Con­sumers Protection (9th Amendment) Regula­tions, 2015. Through these regulations, it has mandated that every origin­ating service provider providing mobile telephone service will, for each call drop within its network:

  • credit the account of the calling consumer by one rupee, provided that such credit in the account of the calling consumer shall be limited to three dropped calls in a day (00:00:00 hours to 23:59:59 hours);
  • provide the calling consumer, through SMS/USSD message, within four hours of the occurrence of the call drop, the details of the amount credited in the consumer’s account; and
  • in the case of post-paid consumers, provide the details of the credit in the next bill.

We are convinced that this regulation is fully implementable and are just awaiting the decision of the Delhi High Court, which has completed the hearing.

What is TRAI’s position on net neutrality? How does it plan to ensure that the interests of various stakeholders are safeguarded?

The issue of net neutrality cropped up in two separate, and pending, consultations initiated by us last year. The first consultation paper, which was released in March 2015, was regarding OTT services and the second one, which we have recently issued, is for differential pricing for data services. We have received a large number of responses from stakeholders for the consultation paper on differential pricing. We are close to finalising our recommendations, so I would not like to comment on this matter at this point.

How far has TRAI succeeded in resolving the issues of tower companies regarding radiation concerns, multiple local levies and right of way (RoW)?

TRAI is not regulating tower companies nor is it involved in the issue of local levies or RoW. These matters come under the ambit of the Department of Telecommu­ni­cations (DoT) and are being considered by it. Having said that, I would like to point out that recently, telecom towers have been allowed to be set up on all central government buildings. The telecom minister has also written to all the chief ministers to allow mobile towers to be set up on state

government buildings within their jurisdiction to check the problem of call drops, which are plaguing mobile communication networks.

Further, given our mandate to enable the orderly development of the industry, TRAI, along with DoT, has set in motion a series of consumer outreach activities through which the public is being infor­med of the fact that the emissions from mobile towers are in fact radio waves and the health concerns are largely misplaced. We have organised meetings in Bhopal, Bengaluru, Pune and Kolkata, and some more may be scheduled, if needed. We are also issuing newspaper advertisements in areas where the fear of the mobile tower electromagnetic field is pervasive.

What is the outlook for voice and data tariffs? What will be the key factors driving this trend?

Voice and data tariffs should largely remain stable. The rapid growth in demand for voice and mobile data services, spurred by the high growth in smartphone penetration, should balance out the increasing investment costs for network infrastructure and spectrum procurement, as well as other development costs for the industry.

What are the key unresolved regulatory issues that the regulator is currently working on? What is the likely timeline for the resolution of these?

The main regulatory issues that we are currently working on are the two I mentioned earlier: OTT services and differential pricing for data. These two issues have got closely interlinked with the issue of net neutrality and policies thereon. I look forward to resolving these matters, both in the specific context as raised by TRAI as well as in the context of giving our advice and recommendations to the government, which is the final authority insofar as net neutrality is concerned.

“We are closely monitoring the actual, on-the-street performance of various telecom networks through drive tests and have issued a regulation on compensation for call drops. These steps will help reduce call drops and improve the quality of service.”

What new announcements can be expected in the coming months?

This year, we have set the pace by giving our recommendations to the government on the reserve price for the auction of spectrum in several bands from 700 MHz to 2500 MHz. The 700 MHz band is being offered for commercial use for the first time. This should enable the industry to further improve service perform­ance, particularly in terms of the quality of services offered.

We have also sent our recommendations to the government on how to better service roll out and implement the BharatNet project. We no longer consider the spread of wireline broadband network to all villages a fancy facility; this is a critical requirement for the development of the country.

Then, several initiatives will be taken on the broadcasting side of TRAI’s activities. The broadcast sector has to be streamlined and the systems have to be updated. With the completion of Phase III of the digitisation process, all urban areas will get digital TV services. This will need an all-round upgradation of systems – management, quality, monitoring, audit, etc.

The existing regulations will be reviewed and new ones, if needed, will be put in place. We have already released a consultation paper on TV-related tariff issues. We plan to look at the entire regulatory framework for the broadcast industry in some detail.

(Note: This interview took place prior to TRAI announcing its regulations on differential pricing.)