In its submission to the Telecom Regulatory Authority of India (TRAI), the telecom companies and global technology players seems to be sparring again. The difference in opinion is over providing fibre connectivity to data centres (DCs), which are considered a key broadband infrastructure for driving growth in the IT-enabled services space.
Reliance Jio, in its submission to the TRAI, has urged the regulator to back fibre connectivity to DCs only via licenced entities. In addition, it has warned that any unwarranted interference would result in regulatory uncertainty, threaten national security and result in wastage of resources causing market distortions, litigations and economic inefficiencies in the sector.
Meanwhile, technology companies have countered Jio’s views, saying any stringent entry barriers would lead to a concentration of DCs around urban markets. As per the technology companies, telcos have not made any substantial investment as such broadband infrastructure in rural areas and small towns, and concentration of DCs in urban areas would undermine the growth prospects of the nascent DC industry.
TRAI, in its discussion paper on the regulatory framework for establishing DCs and content delivery networks (CDNs), has estimated the Indian DC market to be $1.5 billion in 2022, and grow at 11.4 per cent compounded annual rate to scale the $5-billion mark by 2025.
With regard to cloud services and efficient broadband connection, Jio has said that concerns of mobile value-added services providers around telco networks not being suited to deliver cloud services were factually misplaced, given that telcos were poised to roll out low-latency, high speed 5G networks. It added that licensed telcos had already made sizeable investments in networks to support enterprise customers with quality broadband services.
Additionally, the Internet and Mobile Association of India (IAMAI), which represents India’s online and mobile value-added services sectors, in its TRAI submission, emphasised that traditional mobile phone networks are principally designed for mobile voice services or public data services, such as IP services, and accordingly, not suitable for cloud services which require very high availability, bandwidth and low-latency for extremely high amounts of data.
Separately, Jio and Airtel have sparred over the need to regulate content delivery networks (CDNs) to ensure tighter enforcement of net neutrality rules. The CDNs, typically, are a geographically distributed group of servers that work together to provide swift delivery of Internet content. Jio is of the opinion that TRAI should bring CDNs under a regulatory framework so that contractual pacts among internet companies, CDNs, telcos and ISPs can be monitored for any anticompetitive practices and violation of any net neutrality principles. Countering this view, Airtel believes that commercial arrangements between CDNs and ISPs should continue to be governed by market forces and (that) no regulatory intervention is required. Further, Airtel recommended TRAI that the priority of the regulator should be to increase internet penetration by incentivising TSPs/ISPs (in the form license fee waivers) as they have made substantial investments in not only increasing such penetration but also in meeting India’s security needs by ensuring bona fide use of the service and monitoring internet traffic.
