Telecommunication services have been recognised the world over as an important tool for the socio-economic development of a nation. These services not only fulfil the basic need of communicating, but also act as a key support sector for the rapid growth and modernisation of other sectors of the economy. Telecom services have become vital especially on account of the significant growth of information and communication technologies, and their huge impact on the rest of the economy. Therefore, development of an adequate telecommunication infrastructure has become one of the topmost priorities of policymakers.
In the wake of the growing importance of telecom infrastructure in the country?s development, the Telecom Regulatory Authority of India (TRAI) recently released its recommendations on the Telecommunication Infrastructure Policy. The regulator has recommended that the Department of Telecommunications (DoT) bring infrastructure providers (IP-1) under the unified access service licence regime. Currently, infrastructure providers are not covered under any licence but are only registered. The suggestion, if accepted, will lead to an additional annual licence fee charge on infrastructure providers and would impact them adversely.
TRAI has recommended that telecom infrastructure be brought under Section 80 IA of the Income Tax Act, 1961, so that the government provides tax holidays to telecom companies as it does to infrastructure companies in sectors like power, ports and natural gas. As the telecom sector is highly capital intensive, the proposed move will encourage faster rollout of tower infrastructure in rural areas and speed up the rollout of 3G and broadband wireless access (BWA) networks.
?DoT should direct all state governments to ask power distribution companies in their states to provide grid power connectivity on a priority basis for telecom tower sites,? states TRAI. Given that power shortage is a key cause of concern for tower companies, if this recommendation is adhered to strictly, it would significantly reduce network operating costs for them. Power cuts, especially in rural areas, compel operators to run their base transceiver stations on diesel generators, which would increase the operational costs of service providers.
Another key recommendation is that infrastructure providers be permitted to install and share the active network that has been so far limited to antennas, feeder cables, Node B, radio access networks (RAN) and transmission systems, subject to the condition that they are brought under the proposed unified licensing regime. Existing laws permit the sharing of only passive infrastructure but TRAI recommends the sharing of active infrastructure as well. This would reduce the capital expenditure of telecom operators while expanding their network for 3G and BWA services. However, it would also increase the infrastructure providers? cost of installing active infrastructure.
DoT should fix a 45-day time limit for the grant of permission by the local authorities and uniform reinstatement charges for laying cables. This would improve efficiency and reduce the rollout time for tower companies.
The union government should appoint a joint secretary in DoT as a dispute resolution authority for dealing with cases of refusal of permission or imposition of conditions for granting permission by the local authority. However, the larger concern, according to tower operators, is that of ad hoc charges imposed by municipalities across the country. Given that charges for the same kind of work may be more or less similar across cities, towns or villages, it would be better if the restoration charges are prescribed in advance by city type and made applicable across the country.
TRAI recommends that DoT clarify the local authority?s power with regard to the Indian Telegraph Act, 1885. According to the act, the local authorities? powers are limited only to properties that are under its control. But over the past few years, a number of local authorities are levying charges from service providers for telecom towers installed even on private properties.
All ministries under the union government should be advised to install in-building solutions/distributed antenna systems (DAS) within the next one year in all buildings including central PSU buildings, airports and other structures under their jurisdiction and control. TRAI has further recommended that DAS should be mandatorily deployed in 63 Jawaharlal Nehru National Urban Renewal Mission cities within 18 months after the laying of optic fibre networks in these cities under the National Broadband Plan. This will further enhance network coverage in the indoor space at a lower cost and lead to better spectrum utilisation.
According to TRAI, camouflaging tower sites should be made mandatory in heritage buildings and in areas of environmental or architectural importance. The move, however, will increase not only the cost of infrastructure tower companies further but also the burden on telecom service providers.
With the increase in internet usage and to keep the cost of services low, TRAI has recommended that internet exchange points (IXPs) be brought under the Class licence. Once this recommendation is accepted, detailed terms and conditions of the Class licence for IXP services will be provided by TRAI. Data centres may be permitted to connect directly to the IXPs. National-level internet service providers and international internet bandwidth providers may be mandated to connect to all IXPs.
One of the key suggestions made by TRAI is the inclusion of mobile virtual network operators (MVNOs) in the proposed unified service licence regime. Some of the recommendations with respect to MVNOs are:
? MVNOs should be allowed to set up their own infrastructure including mobile switching centres and RAN/base station subsystems if required.
? Further, the commercial model between MVNOs and mobile network operators (MNOs) should be left to mutual agreement between the MVNO and MNO, subject, however, to the licence conditions of both the MVNO and the MNO.
? Allocation of numbers, number portability, interconnection with other service providers and roaming services should be provided to the MVNO by the parent MNO.
? There should be no restriction on the number of MVNOs attached to an MNO, subject, however, to there being only one MVNO in a single revenue district.
? An MVNO cannot attach itself to more than one MNO in the same service area.
? An MVNO should pay spectrum charges on its revenue. The slab applicable to an MNO will be applicable to the MVNO.
The MVNO policy, if implemented, will enable new telecom operators, who do not have funds to expand operations in India?s hypercompetitive mobile market, to meet their legal obligations by expanding their networks.
This is the first time that TRAI has urged that MVNOs be given legal status. Under the suggested policy, which is likely to be made part of the Telecom Policy, 2011, due in four months, any company can purchase a licence delinked from spectrum for a small price. Having purchased this licence, the company can tie up with an existing operator for sharing either the latter?s spectrum alone or the entire network.
The virtual operator can then launch its own branded services, somewhat similar to the way Virgin Mobile was launched in India, though Virgin?s is primarily a marketing deal.
Such a service provider can be based even in a single district and a mobile operator can support several such virtual operators across several districts in the state.
?Allocation of numbers, number portability, interconnection with other service providers and roaming services are to be provided to the MVNO by the parent mobile operator,? states TRAI.
Operators such as Etisalat and Loop are yet to start large-scale commercial operations in most of their circles due to the intense competition in the market and high investment requirement for a network rollout.
According to the suggested policy, such operators can now simply hire other virtual operators and the latter would undertake the establishment, expansion and operation of physical infrastructure such as towers and antennas.
?In case the MVNO desires to exit the business, it would have to give six months? notice to its subscribers, the mobile operator, the licensor (the government) and TRAI before discontinuing its services. Consequently, the MNO (parent operator) should enable them to migrate to any of the MNO?s tariff plans without any extra charges,? notes TRAI.
