Telecom operators have collectively opposed any move towards introducing differential licensing via unbundling of various layers in telecom services.
In telcos argument on the Telecom Regulatory Authority of India’s (TRAI) discussion paper ‘Enabling unbundling of different layers through differential licensing,’ the proposal goes against regulatory consistency and would impact investments made in the sector leading to investor uncertainty.
In this regard, Reliance Jio, Vodafone Idea (Vi), and Airtel along with Cellular Operators Association of India (COAI) have asserted that such unbundling is neither necessary nor desirable.
Commenting on the matter, Vi has told the TRAI that that there is an urgent need to address underlying issue of poor financial health rather than recommend or implement yet another licensing framework that would create ambiguity and additional challenges and deter investments.
Further, Reliance Jio said that a converged licence for network and service layer offers clarity, and certainty to an operator making investment in the network. Any move to split the functions would be regressive and increase the sector’s compliance burden. The telco added that any step to separate a network licence will be a regressive step which will introduce uncertainty in the licensing regime, increase the compliance burden and adversely impact the future investment in the networks.
Furthermore, responding to TRAI’s paper, Bharti Airtel asserted that there must be no fundamental change to licensing regime, which in any case is working fine. Citing the massive investments made in the sector, Airtel said priority areas like strengthening of telecom infrastructure and broadband services would require enormous fund infusion. The investment requirements is estimated to be about Rs 2,000,000 million over the next 2-3 years for spectrum, technology, equipment and fibre backbone. For generating such amount of investment, government needs to provide incentives, reduce regulatory cost, provide appropriate policy and financial stimulus to the existing telecom service providers under the current licensing framework rather than changing the licensing regime itself. It said existing licensing regime supports a layered approach including infrastructure providers. Any structural change in the licensing regime leads to regulatory uncertainty and will deter investors from investing in the future