The Indian telecom sector is on a new growth trajectory. Data consumption is at its peak and is growing further. Concerted efforts have been made to develop a robust telecom infrastructure both at the industry and policy levels. The most noteworthy development has been the introduction of the National Digital Communications Policy (NDCP) 2018, which amongst many other things, called for enhancing the role of infrastructure providers (IP-1s) by allowing them to share active infrastructure with telecom service providers. With the right regulatory and policy impetus, active equipment sharing can prove to be a veritable game changer for the industry. At tele.net’s recent conference on Telecom Infrastructure in India, U.K. Srivastava, Principal Advisor, Telecom Regulatory Authority of India (TRAI), talked about the resolved and unresolved challenges related to active infrastructure sharing, as well as the need for a conducive regulatory environment to promote such sharing in India. Excerpts…
We are at an inflection point as far as the telecom industry is concerned. As per the latest data released by TRAI, every user downloads over 9 GB data per month. The overall data usage in the country, at present, is in excess of 5 EBs per month. This exhibits Indian consumers’ tremendous appetite for data and the country’s swift journey towards a digital future. However, most of this data download and consumption is happening over cellular technologies. We have very little penetration of fixed broadband in the country. To catapult the telecom industry onto a higher growth trajectory, we will have to work towards ensuring fresh investments in the sector. For these investments to become a reality, we will need to enhance the role of infrastructure providers.
Conducive regulatory environment
TRAI had a big role to play, by way of recommendations, in the formulation of NDCP 2018. Generally, when policies are formulated, the regulator does not make recommendations directly. But this time round, the government requested TRAI to do so, and we carried out a consultation process and gave our recommendations based on stakeholders’ comments.
A key objective under the new policy that directly concerns the infrastructure sector is to encourage and facilitate the sharing of active infrastructure by enhancing the scope of IP-1s, and promoting and incentivising the deployment of common, shareable active and passive infrastructure.
While the government has not yet sought any recommendations from TRAI on the sharing of active infrastructure, we are vigorously working on the subject since it is a part of NDCP 2018. We have had meaningful consultations with the industry around the subject, and the general consensus is that active infrastructure sharing should be permitted.
Here, it is important to take a step back, go into the past, and understand how infrastructure providers came into existence and how, at some point in time, they were stopped from creating active infrastructure. Initially, there were two categories of infrastructure providers – IP-1 and IP-2 – under which infrastructure providers were registered/licensed. IP-1s and IP-2s were created in 2000, prior to which the entire infrastructure was created by service providers themselves.
So, when these two categories of infrastructure providers were introduced, they were subject to a certain set of terms and conditions. IP-1s were permitted to establish and maintain assets such as dark fibre, right of way (RoW), duct space and tower for the purpose of granting the same on lease/ rent/sale basis to licensees of telecom services on mutually agreed terms and conditions. It was said that companies will share infrastructure assets with all the other providers on a non-discriminatory basis. There have been instances where some organisations had taken IP-1 registrations but had refused to share the infrastructure and the regulator had to intervene.
IP-1s were strictly told not to get involved in the sharing of active infrastructure. Meanwhile, IP-2s were supposed to create active infrastructure for interconnection and only for telecom service providers. They were prohibited from connecting with customers directly.
In 2000, a new licence was created for offering national long distance (NLD) services. NLD licensees were permitted to provide intra-circle and intercircle connectivity. They were also allowed to connect with customers directly. Since the role of IP-2 was subsumed in the role of NLD service providers to a large extent, the former category was discontinued in 2005. Consequently, the Department of Telecommunications (DoT) asked IP-2s to move to NLD licence. At that time, only four to five IP-2s were operating in the industry. As IP-2 migrated to NLD, the active infrastructure sharing business was stopped.
Later, in 2009, DoT enhanced the scope of IP-1. In a letter issued on March 9, 2009, the department said that IP-1s can create active infrastructure limited to antennae, feeder cables, Node B, radio access networks and transmission systems for and on behalf of telecom service providers. Interestingly, DoT’s 2009 order was further clarified in 2016 and infrastructure providers were asked to go for virtual network operator (VNO) licences. Now, if a company opts for a VNO (access) licence, it gets tied up to only one network service operator (NSO). However, in the case of VNO (ISP), a company can collaborate with multiple NSOs. That said, the industry interest in VNOs has been limited so far.
In April 2007, TRAI had given a recommendation that active infrastructure sharing between telecom service providers should be permitted. In that, we said that active infrastructure sharing limited to antennae, feeder cables, Node B, radio access networks and transmission systems should be allowed among licensed telecom service providers. While DoT accepted our recommendations and issued guidelines in this respect, it was only in 2016 that the licence amendment finally happened. A big perceived risk is that if the sharing of active infrastructure is allowed, it might discourage service providers from bidding for spectrum. They might go for a model where only one of them bids for spectrum and others share that spectrum. Thus, to avoid any such scenario, it becomes imperative that certain restrictions are put in place before we give a go ahead to active infrastructure sharing.
In case of in-building solutions, we have made a very specific recommendation to the government, asking that telecom service providers should not be allowed to enter into exclusive agreements with building owners. It is not advisable to permit telecom service providers to bring their own infrastructure into a building. If it is possible to share infrastructure, why should the same infrastructure be built three times or four times by different service providers? It is definitely not advisable to disfigure a building by multiple rounds of digging and laying of cables and so on. Also, many a time, buildings do not have sufficient space for installing telecom equipment, etc.
In 2015, the National Building Code was amended to add the provision of telecom infrastructure. State governments, too, were asked to incorporate the changes in their respective building codes so that every building has a facility for installing telecom gear.
Net, net, when it comes to infrastructure, there are a number of issues that need immediate attention. All buildings should have the facility for housing telecom infrastructure. Building owners should not be allowed to get involved with telecom service providers on an exclusive basis, as this will hinder other service providers from infrastructure sharing. There should be a neutral party that should set up infrastructure, which can be shared by multiple entities. This will also bring down capex and opex.
Interestingly, when we talk of 5G, we use terms such as cell densification and street furniture. TRAI is actively working on these issues too. We are looking at ways to ensure that local bodies lease out and provide RoW to infrastructure providers. We are also formulating the terms and conditions on the basis of which infrastructure can be made available to IP-1s.
As far as the issue of what defines active infrastructure is concerned, it is more or less settled, as there is an ITU recommendation that defines the components of active infrastructure. That said, active infrastructure sharing is possible only when regulations enable it. A scenario where service providers can have their radio frequency equipment in the same band and can still share the infrastructure is technically feasible. We now need to make it a reality and enable this through licensing conditions and a supportive regulatory environment.