Reforms 2.0 on anvil to take telecom revolution to every nook and cranny of India

The Government is working on a second set of reforms aimed at creating strong mobile phone operators who can provide services overseas while connecting the remotest corners of the country

On July 31, 1995, first mobile telephone call was made. The then Minister of Communications (MOC), Sukh Ram spoke to West Bengal Chief Minister Jyothi Basu on Telstra's mobile network.

Initially call rates ranged from Rs 8.4 per minute (both incoming and outgoing) to Rs16.8 per minute in peak hours. At that time mobile instruments were priced around Rs40,000 making them unaffordable for common man. Mobile networks gradually transited from voice centric to data centric. Initial mobile networks (2G) were basically voice centric supporting SMS. The networks evolved gradually to 2.5G (supporting GPRS), 2.75G (supporting EDGE), 3G, 4G and 5G (20Gbps) technology supporting higher and higher speeds. Centre for Development of Telematics (CDOT) has recently been asked to start working on 6G. Samsung and Huawei have already been working on this technology which promises speeds 50 times faster than 5G. Commercial launch of 6G technology is likely by 2030.

Due to enabling policies of the Government of India (GOI), telecom has become accessible to even people living in remote areas. We have come a long way making telecom tariffs affordable to the common man.

Our data tariff rates are the lowest in the world, followed by Israel, Kyrgyzstan, Italy and Ukraine. Global average data tariff is Rs 366/GB. India's mobile data consumption figures are mind boggling. Average data consumption per smartphone is 14.6 GB per month, which is the second highest in the world. Total mobile data traffic has grown to 9.5 EB (exabytes) per month in 2020 from 6.9 EB.

Various enabling policies of GoI for bringing telecom to common man are as follows:

1. Opening the competition: The first policy enabler is to open up the telecom sector for competition and to give licence to multiple operators.

2. Separation of functions: Separation of operations function, regulation function and licencing function handled by DOT. Operation function was taken care of by BSNL, regulation function by TRAI and licencing function remained with DOT.

3. Policy of forbearance

a. Forbearance of tariff: It denotes that TRAI has not for the time being notified any tariff and service providers are free to fix tariff. As per the existing regulatory framework, tariffs for telecom services are under forbearance except for rural fixed line services, national roaming services, leased circuits and MNP charges.

b. Non-interference in tariff fixation from government/regulator: Recently there was demand for floor pricing by all operators, except, JIO. VI was demanding it strongly because of its very bad financial situation. Because of the reforms announced by Ministry of Communications (MOC), there is no need now for floor pricing. Government is of the opinion that tariff is in between customers and service providers and the government should not be involved in it.

4. MNP, FMNP: It Increased competition and the need for the operators for improving Quality of Service (QOS).

5. Creation of USO (Universal Service Obligation) Fund: To encourage Telecom Service Providers (TSPs) to provide services in remote, hilly and inaccessible areas where capex required is more and services are unremunerative, USO fund was created by GoI in 2002. USO gives subsidies for capital expenditure as well as for maintenance expenditure. TSPs contribute through universal service levy of 5 per cent on AGR (Adjusted Gross Revenue) to this fund.

6. ROW (Right of way) policy of GoI: To implement the vision of availability of digital infrastructure to everybody GoI came out with ROW rules in 2016. Many states/UTs have aligned their ROW policies with that of GoI. The rules cover optical fiber laying as well as tower installation. This policy has several enabling features.

7. Revenue maximisation as well as public good: Telecom sector has the element of not only revenue maximisation but also public good. During Covid, people have felt the public good aspect of telecom. TSPs have ensured good availability of networks. During Covid times because of work from home, online education, online transactions etc., data consumption has increased and the networks are robust enough to take the additional load. Telecom sector had a minimal impact of the lock down. Telecom became the centre platform for all the sectors during the pandemic. While pursuing a revenue maximisation objective, the aspect of public good will be taken into account by the government.

8. Productivity Linked Incentive (PLI) scheme: This scheme promotes 'vocal for local' policy. Financial incentive is given to boost domestic manufacturing of telecom and networking products. Because of the PLI scheme and also because of the prudent policy of the government to continue manufacturing in Covid times the mobile phone manufacturing industry has made significant progress in manufacturing and exports. There is a sharp decline in the import of mobile phones. From a mobile phone importing nation, we have become a net exporting nation.

9. Net neutrality: As per network neutrality principle TSPs/ISPs (Internet Service Providers) must treat all the available data that travels via their network fairly without any improper discrimination. This principle promotes free and open internet where users can access content without restriction. Sites/applications/users will not be discriminated. This principle ensures innovation and promotes competition.

10. National Broadband Mission (NBM):

- Broadband access to all villages by 2022

- Improve QOS for mobile and Internet

- Develop BRI. DoT is rating the states/UTs on BRI. BRI is the measurement of availability of digital communication infrastructure and conductive policy ecosystem.

- Create Digital fibre map and tower map

- Laying of incremental 30 lakh km of route fiber and increase tower density from 0.42 to one per thousand population

- Fiberization of at least 70 per cent of towers

11. Providing fibre connectivity to all villages in 1000 days as announced by PM on August 15, 2020.

12. Sharing of infra: Recently following the amendment made by DoT in the licence norms, active infra including core networks can be shared. Before this amendment active infra sharing was allowed only for node B and transmission systems and passive infra sharing.

13. VSATs: It can be used to provide backhaul for mobile networks. This amendment helps in faster rollout of mobile networks in the North-East region.

14. Reforms announced by MOC:

- Four year moratorium on payment of government dues

- Option to government to convert the due amount pertaining to deferred payment to equity at the end of moratorium period.

- Redefinition of AGR (prospectively) - earlier dividend, sale of handsets, rent, profit from the sale of scrap were also included in AGR definition

- Removal of spectrum usage charges from future auctions

- Reduction of bank guarantees by 80 per cent,

- Permission to surrender unused spectrum, permission to share spectrum

- Allowing 100 per cent FDI in telecom services under the automatic route. Earlier it was 49 per cent.

- DoT has amended, w.e.f October 01, 2021, licence norms and will charge two per cent (instead of four per cent) above the one year MCLR of SBI for delay payment of statutory dues and the interest will be compounded annually (instead of monthly). Penalty for short payment is removed.

Looking to future

1. Atma Nirbharta principle: This principle removes the dependency on imported equipment, decreases equipment costs and addresses security concerns. TCS consortium is going to deploy the first indigenous 4G network of India in BSNL. Core network is designed by CDOT, Software is from TCS and Radio equipment is from Tejas. Our country is the fifth one to join the pride club of four nations having such capability. BSNL will be the first PSU to implement this principle.

2. The Government is considering withdrawing legal cases involving disputes with the TSPs and going for out of court settlements.

3. Giving licence to satellite broadband service operators: Many operators are going to apply for a licence to provide satellite based broadband services. 75 per cent of rural India does not have access to broadband as many locations are still without cellular/fibre connectivity. Satellite medium is the only option there.

4. Vision of government-provision of overseas services by our operators: The Government is working on a second set of reforms aimed at creating strong mobile phone operators who can provide services overseas while connecting the remotest corners of the country.

(The author is a former Advisor, Department of Telecommunications (DoT), Government of India)

Evolution of mobile data tariff

Year -Rs/GB

2014 -269/GB

2015 -227/GB

2016 -75.6/GB

2017 -19.3/GB

2021- 12 /GB