The Indian telecom space witnessed significant action on the policy and regulatory front during 2020. From the historic judgement on the long-pending adjusted gross revenue (AGR) issue, which granted operators a 10-year time frame to pay pending dues, to the launch of the PM Wi-Fi Access Network Interface (PM-WANI) initiative for public Wi-Fi services, the year witnessed noteworthy policy initiatives. The launch of the production-linked incentive (PLI) scheme for domestic mobile phone manufacturing was another notable development. Moreover, the year ended on a positive note with the government announcing spectrum auctions for 4G services beginning March 1, 2021 and the zero interconnection usage charges (IUC) regime coming into effect from January 2021.

On the regulatory front, the Telecom Regulatory Authority of India (TRAI) released its much-awaited recommendations on enhancing the scope of IP-1s to include active infrastructure sharing. Further, the regulator initiated consultations and released its recommendations on several pertinent issues such as broadband proliferation, over the top (OTT) regulatory framework, and net neutrality.

A look at the key policy and regulatory moves during 2020…

Covid-19-induced relief measures

The year 2020 was different than the previous ones owing to the Covid-19 pandemic, so, telcos needed different policy and regulatory support measures. To this end, the Department of Telecommunications (DoT) as well as TRAI adopted a collaborative approach and supported telcos through various initiatives. Since telcos found it difficult to follow stringent regulatory norms while ensuring uninterrupted supply of telecom services, especially during the Covid-19-induced lockdown, DoT extended the deadline of compliance and audit for telecom operators and granted an extension for meeting their minimum network roll-out obligations till September 30, 2020, invoking the force majeure clause in operator licence rules. The registration and testing related to the roll-out obligations of telcos was also suspended for a brief period of time. Further, the time frame for self-certification of radiation norms for the installation of new mobile towers and upgradation of the existing cell sites was relaxed and service providers were allowed to self-certify within 30 days of commissioning new mobile towers or upgrading the existing units.

The long-awaited AGR verdict

On September 1, 2020, the Supreme Court put an end to the AGR issue by granting telcos a 10-year time period to pay their outstanding AGR dues. Telcos can now make payments in annual instalments till March 2031, after making a 10 per cent upfront payment by March 2021. However, the court refused to entertain any objection to the AGR-related demand and ruled out any possibility of a reassessment or recalculation by telcos.

Moreover, the Supreme Court asked DoT to withdraw its demands of payments from non-telecom public sector undertakings (PSUs); following this, the department withdrew its demand orders.

Thrust on in-flight and public Wi-Fi services

Wi-Fi remained a key focus area for the government during 2020. In February 2020, the government amended the aircraft rules allowing customers to access Wi-Fi services on flights, upon permission from the pilot-in-command.

However, the biggest development in the Wi-Fi space remained the launch of the PM-WANI initiative. Under this initiative, public Wi-Fi networks will be set up by public data office aggregators that would provide services through public data offices (PDOs). As per the government, there would be no licence fee or registration for opening such PDOs.

Security is priority

Ensuring the security of telecom networks became a key priority for the government. To this end, the Cabinet Committee on Security announced the National Security Directive, which will mandate service providers to purchase telecom equipment from trusted sources. Under the provisions of the National Security Directive, the government will declare a list of trusted sources and products for installation in the country’s telecom network. The list of the trusted sources and products will be decided based on approval of the National Security Committee on Telecom.

In another key move pertaining to national security, DoT directed internet service providers (ISPs) and telcos to block access to around 224 China-based apps. According to the government, the apps were banned to counter the threat that they pose to the country’s sovereignty, security and citizens’ privacy.

Efforts towards mainstreaming 5G and AI

The government remained focused on working towards mainstreaming 5G and artificial intelligence (AI) technologies. In the 5G space, the government constituted working groups to explore the implementation of 5G across eight different sectors – agriculture, fintech, transportation, education, healthcare, water and sewage management, Industry 4.0 and smart grids. These working groups will study and submit a report on how 5G can be used in each sector. For giving a major push to AI, the government launched the National AI Portal, which will work as a one-stop digital platform for all AI-related developments in India.

Paving the way for spectrum auctions

The year ended on a positive note with the union cabinet approving a proposal for auctioning 2251.25 MHz of spectrum worth Rs 3.92 trillion at the base price in December 2020. In the 4G spectrum auctions scheduled to begin from March 1, 2021, airwaves in seven frequency bands ranging from 700 MHz to 2500 MHz will be offered to telcos for a period of 20 years. Post the cabinet’s approval, DoT issued the notice inviting applications for the spectrum auctions. The last date for the submission of applications is February 5, 2021. All the successful bidders will have to pay the amount within 10 days.

Other policy moves

DoT also undertook other key measures. First, it mandated prefixing “0” for all calls made from fixed lines to mobiles, effective January 15, 2021. The move was initiated after TRAI recommended a “0” prefix for all such calls to create sufficient numbering space for telecom service providers. Further, DoT modified its norms for network testing before commercial launch of services and extended the maximum available time to 180 days. As per the new norms, the total number of test subscribers of any telco shall not exceed 5 per cent of the installed capacity of the company.

Moreover, the department agreed to provide 5 MHz from the premium 700 MHz band to Indian Railways for signalling purposes. However, it specified that these airwaves should be used for non-commercial purposes.

In a bid to improve the ease of doing business, DoT moved the wireless licensing regime to the Saral Sanchar portal, with effect from August 1, 2020. All licences issued by DoT shall be issued through the online system on the Saral Sanchar portal in view of the government policy on ease of doing business and making the licensing process transparent.

Make in India, make for the world

Major steps were undertaken to boost domestic electronics manufacturing in the country and develop India as an export hub. The government launched three major schemes – the PLI scheme for large-scale electronics manufacturing, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors, and the Modified Electronics Manufacturing Clusters scheme. Among these, the PLI scheme seems to be of particular interest for the telecom sector. The scheme aims to reverse the trend of importing materials for mobile phone manufacturing, and encourage companies to set up manufacturing hubs in India and export to overseas markets. In addition, a PLI scheme pertaining to domestic manufacturing of telecom and network equipment was recently approved by the Digital Communications Commission as well as the union cabinet. As per industry reports, the new scheme having a total outlay of Rs 122 billion has now been finalised. It is expected to be notified soon.

Key consultations and noteworthy recommendations

The most noteworthy recommendation by TRAI during 2020 remained the one on enhancing the scope of IP-1s. As per TRAI, tower service providers should be allowed to engage in partial active infrastructure sharing, limited to radio access network (RAN) gear only and not licensed spectrum resources. TRAI also suggested that the scope of IP-1 registration should include right of way, duct space, optical fibre, towers, feeder cables, antennas, base stations, in-building solutions, and distributed antenna systems.

Further, the authority floated a series of consultation papers during the year to address industry concerns. These included consultations on the road map to promote broadband connectivity and enhance broadband speed; changes required to ensure fair billing for consumers; enabling unbundling of different layers through differential licensing; regulation of international mobile roaming (IMR) services; methodology of applying spectrum usage charges (SUC) under the weighted average method of SUC assessment in cases of spectrum sharing; traffic management practices and multi-stakeholder body for net neutrality; and provision of cellular backhaul connectivity via satellite through very small aperture terminals (VSATs) under commercial VSAT closed user group (CUG) service authorisation.

A number of these consultations were completed during the year and recommendations were issued. In its recommendations on traffic management practices and multi-stakeholder body for net neutrality, TRAI suggested that a multi-stakeholder body comprising all telecom and internet service providers and other stakeholders such as content providers, researchers, and the government should be set up under DoT to ensure adherence to rules under the regime. On the issue of SUC application methodology, TRAI suggested that the incremental SUC of 0.5 per cent should apply on the spectrum holding in the specific band in which sharing is taking place, and not on the entire spectrum holding of the licensee.

Another key recommendation was issued on the regulatory framework for OTT communication services. TRAI suggested that the country does not need a comprehensive regulatory framework for various aspects of OTT services beyond the laws and regulations prescribed at present.

Other recommendations by TRAI included suggesting a light-touch regulatory framework for cloud services by setting up an industry body through a three-step process; allowing telecom service providers to enrol test users in the testing phase to carry out network testing before the commercial launch of wireline services; and simplifying norms for captive VSAT CUG licences by slashing the initial financial bank guarantee submitted by a firm prior to the signing of a captive VSAT CUG licence by half (from the initial Rs 3 million to Rs 1.5 million).

Other regulatory moves

TRAI took key steps to ensure transparency and stop telcos from discriminating against users. To this end, it issued amended rules for IMR and directed operators to ensure IMR services are deactivated by default and are activated only when asked by consumers. For protecting users against pesky calls and messages, TRAI directed all operators to ensure a time-bound registration of entities sending bulk commercial messages and run media campaigns informing users of ways to register their consent/preferences regarding pesky calls and messages.

Taking a strong stance to prevent discrimination among users, TRAI blocked Bharti Airtel’s Platinum and Vodafone Idea Limited’s RedX premium plans, citing that such plans violate quality of service norms and offer faster data speeds and priority services to high-paying post-paid customers. Meanwhile, TRAI notified certain changes to the telecom interconnection rules to pave the way for easier interconnectivity between any two fixed line networks, and between fixed line and national long distance networks.

Outlook for 2021

The upcoming year seems to be an exciting one for the Indian telecom space with spectrum auctions just around the corner. It would be interesting to see telcos bidding for airwaves after a long span of time. Further, one can expect 5G spectrum auctions to occur during the year, which can prove to be a game changer for India’s digital landscape. The satcom space is another area that would witness high action with the government working on a new satcom policy that is focused on increasing privatisation in the sector.

By Kuhu Singh Abbhi