Steeped in controversy and facing policy and regulatory uncertainty, the telecom industry saw some forward-looking initiatives from the government and the Telecom Regulatory Authority of India (TRAI).
One of the big developments of 2012 was the announcement of the National Telecom Policy (NTP), 2012, which seeks to provide a predictable and stable policy regime for the industry. The policy guidelines were cleared by the cabinet in June. The new policy replaces the NTP, 1999, which came up for revision following the 2G spectrum scandal that rocked the telecom industry.
Another initiative taken during the year was TRAI ensuring operator compliance with quality of service (QoS) parameters. To ensure strict compliance, the regulator introduced financial disincentives for erring operators providing basic telephony and broadband services.
TRAI also initiated efforts to encourage mobile banking. The Mobile Banking (QoS) Regulations, 2012 aim to ensure that operators offer trouble-free and secure mobile banking services to customers.
Continuing with its endeavour to stop unsolicited calls, TRAI issued the Telecom Commercial Communications Customer Preference (Tenth Amendment) Regulations, 2012, and the Telecommunication Tariff (Fifty Fourth Amendment) Order, 2012. The effort was to restrict unregistered telemarketers from sending bulk promotional SMSs to customers. Towards this end, TRAI placed a price restraint on telemarketers for sending more than 100 SMSs per day per SIM.
A look at the significant regulatory developments of 2012?
NTP, 2012
The key objectives of the NTP, 2012 are affordability and availability of effective communication services. Revenue generation is only a secondary objective. The highlights of the NTP, 2012 are as follows:
Increasing rural teledensity from around 39 per cent at present to 70 per cent by 2017 and 100 per cent by 2020
Positioning the mobile phone as an instrument of empowerment for all
Broadband at a minimum download speed of 2 Mbps
Encouraging domestic manufacturing
Promoting convergence of network, services and devices
Liberalising spectrum usage to allow any service in any technology.
Simplification of the licensing regime through unified licensing, delinking of spectrum from licence, online real-time submission and processing
Promoting resale of services
Achieving one-nation full mobile number portability and working towards one-nation free roaming
Allowing VoIP services
Cloud computing, next-generation networks including IPv6.
With the NTP, 2012, the government hopes to accelerate inclusive socio-economic development and bring about consolidation in the industry. The policy aims to accelerate sector growth by focusing on spectrum management, broadband-on-demand, domestic manufacturing and rural coverage.
Consumer rights
In January 2012, following a two-year consultation process, TRAI brought out the Telecom Consumers Complaint Redressal Regulations, 2012 to replace the Telecom Consumers Protection and Redressal of Grievances Regulations issued in May 2007. The new set of directives seeks to ensure the establishment of a complaint centre and a general information number, set the time limit for redressal of complaints, and establish and compose an appellate authority for redressal of complaints. The regulations direct all operators to set up a complaint centre, which should have a toll-free number and which can be accessed by subscribers of other mobile operators as well. Further, TRAI has mandated all operators to set up a web-based complaint monitoring system to help consumers track the status of their complaints. Every complaint centre has to be accessible to consumers between 8 a.m. and 12 a.m., seven days of the week. In doing this, TRAI has replaced the three-tier complaint redressal mechanism with a two-tier system that comprises a nodal call centre and an appellate authority.
Addressing customer concerns regarding difficulty in navigating the interactive voice response (IVR) system menu at call centres, TRAI has prescribed the manner in which the IVR menu should be managed (such as speaking to a customer care agent). TRAI also mandated that if the consumer continued to be dissatisfied with the resolution of the complaint, he/she could approach the next tier ? the appellate authority. The new regulations also provide for time-bound resolution of complaints received by the authority and referred to the service provider.
Mobile banking
In its effort to promote banking through mobile phones, in April 2012, TRAI issued the Mobile Banking (QoS) Regulations, 2012. The regulations prescribe several guidelines for operators to provide reliable and faster mobile banking services to customers on the move.
According to the guidelines, operators are required to provide banks and customers with the option of conducting transactions using multiple modes. These include SMS, IVR and unstructured supplementary service data (USSD). Operators can optionally provide wireless application protocol (WAP) or SIM application toolkit (STK) to facilitate bank transactions. The response time for delivery of messages generated by the customer or the bank is mandated to be less than 10 seconds for SMS, IVR, WAP and STK, and less than two seconds for USSD. While using SMS for mobile banking transactions, operators must ensure that a report confirming the delivery of the message is sent to the customer or the bank as the case may be. Further, if an SMS sent by the bank, is not delivered within 72 hours to the customer due to network congestion or handset-related problems, a USSD communication confirming the completion of the transaction must be sent. The regulator has made it mandatory for operators to ensure that a customer is able to complete any given banking transaction in not more than two stages. These transactions could be of varied nature including cash deposit, cash withdrawal, money transfer or balance enquiry. Operators are required to comply with the existing QoS parameters while providing mobile banking communication through their networks. TRAI will monitor these and other QoS parameters of services offered by operators on a regular basis.
Broadband services
Prescribing financial disincentives for service providers failing to meet the QoS benchmarks for broadband services, TRAI, in December 2012, came out with the Quality of Service of Broadband Service (Amendment) Regulations, 2012.
According to the regulations, operators submitting false compliance reports on the quality of broadband services will face a penalty of up to Rs 1 million. The regulations become effective in January 2013. TRAI?s recommendations also include a penalty of up to Rs 50,000 for each QoS parameter that the operator fails to meet. Further, in case of a second or subsequent contravention of these rules, a penalty of up to Rs 100,000 per parameter will be levied. The parameters for QoS include activation time for a broadband connection, fault repair or service restoration time, billing issues, response time to the customer for assistance and connection speed.
Wireless data services
In December 2012, TRAI issued the Standards of Quality of Service for Wireless Data Services Regulations, 2012. It mandated that cellular service providers or unified access service providers will have to establish a test set-up, comprising servers and test probes, to cover the entire geographical coverage area of different data services in the licensed service area.
As per the guidelines, service providers are required to meet the QoS benchmarks for wireless data services with respect to parameters like provision or activation of data services, successful data transmission download/upload attempts from a test server, minimum download speed from a test server covering all tariff plans, average throughput for packet data from a test server for all tariff plans, latency for data services from a test server, PDP context activation success rate and data drop rate.
TRAI has also asked operators to publish the details and tariffs of all data services offered on their website. They also need to clearly mention the cities and towns where such data services and tariff plans are applicable.
Telecommunication infrastructure policy
In December 2012, TRAI announced the International Telecommunication Cable Landing Stations Access Facilitation Charges and Co-Location Charges Regulations, 2012. This is the second set of regulations issued by TRAI on this subject. Prior to this, in 2007, TRAI had issued the International Telecommunication Access to Essential Facility at Cable Landing Station Regulations and had thereafter issued a consultation paper on March 22, 2012.
As per TRAI?s latest regulations, operators will have to pay Rs 36,000 per annum as access facilitation charges per unit capacity for STM 1 capacity and Rs 0.625 million for STM 64 capacity at the cable landing station. Further, the access facilitation charges for alternative locations range from Rs 111,000 to Rs 1.95 million per annum.
The revised access facilitation charges will help reduce the price of international private leased circuits for business processing outsourcing/call centres, small and medium enterprises and other information technology-enabled service providers. Access facilitation charges are payable by international long distance operators or internet service providers to the owner of the cable landing station to access international bandwidth through a submarine cable. Submarine cables provide international telecommunication links between countries across the world and these cables terminate in the country through cable landing stations.
Conclusion
Going forward, 2013 is likely to see more action on the regulatory front. TRAI is looking into the responses received from operators on the consultation paper floated by it on terminating inactive connections. The operators are in favour of imposing a fixed fee on inactive users for allowing them to keep their inactive connections in ?safe custody? for two months. TRAI has also issued recommendations on the unified licence regime. If its proposal on cross-holding is accepted, telecom companies will be able to hold stakes in multiple entities in the same operating circle. The year 2013 will see TRAI coming up with crucial recommendations and policies that will accelerate growth in the sector.
