TELECOM: A TALE OF RECOVERY AND HEADWAY
With the pandemic still in sight, it is important to note the telecom industry’s role in fortifying connections during the crisis. Not only did it manage to keep the strings of network taut through new-age digital tools such as cloud computing, but also nurtured modernistic technology such as the Internet of Things (IoT), augmented and virtual realities that are soon to be a part of our regular life due to this accelerated push towards the digital.
COAI has met its mark by providing a much-important platform among telecom operators, industry stakeholders, and government bodies and enabling the channels to remain functional and updated. It actively worked with Telecom Service Providers (TSPs) to allow businesses to digitise themselves. COAI became a part of the TEC Committee on “Roll out of Street Infrastructure and Small Cells for 5G Networks” and provided key inputs to TEC, which were part of the committee’s recommendations. On COAI’s request for allocation of street furniture to support the speedy roll-out of infrastructure for 5G technology, a task force in the states of Punjab and Himachal Pradesh was formed for the utilisation of government infrastructure and street furniture at a nominal rent for the rolling out of 5G services and for aerial Optical Fiber Cables (OFCs).
COAI also took steps to safeguard the telecom infrastructure across regions. It sent representations to the chief secretaries of all States/UTs to issue necessary directions for telecom and digital infrastructure safety in their respective jurisdictions. As a direct result of this request, the State Governments of as many as six states – Jharkhand, Tamil Nadu, Assam, Manipur, Meghalaya, and Odisha – issued positive directions to the concerned Deputy Commissioners/District Collectors/Superintendent of Police to be vigilant and take necessary action in safeguarding the Telecom/Digital Infrastructure in their jurisdiction.
One of the key tools in this modern engine propelling India towards a digital revolution is the 5G technology, which will transform industries by connecting more businesses than ever to the internet. In addition to advocating for immediate financial reliefs to the telecom sector so that the TSPs can make the required investments, the COAI also played its role in demystifying misinformation linking 5G technology that is being spread in several regions of the country. Based on COAI’s request, positive directions were issued by Haryana, UP Police, Gujarat, and Rajasthan to “Demystify the Misinformation being spread linking 5G technology and testing with the COVID-19 pandemic”.
As we all know and understand by now, digital is the new reality for us, and it is here to stay. However, the path towards that future is riddled with adversities that need strong conviction and effort to overcome. COAI, seeking the adoption of regularised standards for 5G in India, submitted that the Government might make efforts for global harmonisation of 5Gi standards by making it a part of 3GPP to ensure early adoption by operators without any policy intervention and all stakeholders can reap the benefits of economies of scale. 5Gi has been officially closed and will soon be merged with 3GPP-Rel 17 standards. Following the COAI submission, the Telecommunication Engineering Centre (TEC) will also adopt 3GPP Rel-15 & 3GPP Rel-16 as the national standards of India.
Not just these, COAI was also actively involved in conducting Consumer Education Workshops (CEWs) virtually during the pandemic. It helped simplify Mobile Number Portability, enforced suitable action in several states on providing Electricity connections to the telecom industry, helped telecom warriors get categorised as frontline workers to get the vaccines on priority, and also saved an estimated 15 crore annually for the telecom industry by leading a coordinated joint effort to eliminate Track Rent Charges, that resulted in the Govt of Tamil Nadu taking the charges off.
Priority EB tariff at Industrial tariff
COAI submitted letters to Secretary Power/Energy for priority EB tariff at Industrial/Favourable tariff. Based on this request, positive letters were issued by Jharkhand, J&K, Ladakh, and Madhya Pradesh to take suitable action. COAI also submitted a letter to CERC for priority EB tariff at Industrial/Favourable tariff and submitted a representation to the State Electricity Regulatory Commission (SERC)/ Joint Electricity Regulatory Commission (JERC) of 30 States/UTs for priority EB connection and at industrial rates.
Regarding the setting up of poles
In Madhya Pradesh, charges for using poles were increased suddenly by five times, thus marking the rate at Rs 500/per pole per year. After a request made by COAI into the matter, the charges were reduced to Rs 200/per pole. Thus, the association saved an estimated Rs 10 lakh for the industry.
Moreover, the COAI also led a series of efforts in Rajasthan. After this, the Govt of Rajasthan approved the reduction in the laying of Aerial OFC, fixing it at Rs 1,000/- per pole annually. This enabled the COAI to save an estimated Rs 13 crore per month for this financial year.
The State Govt of Rajasthan also reduced the charges of setting up manholes to Rs 2,000/- per manhole/chamber at District Headquarters and Rs 1,000/- per manhole/chamber in other towns. Thus, the COAI managed to save an approximate 2-2.5 crore this fiscal year in this way.
COAI’s role in standardising industry parameters
COAI led a joint industry effort and submitted a letter to the Department of Telecommunications (DoT), stating the practical challenges associated with the implementation guidelines issued by DoT for storage for ‘Parameters for Internet Protocol Detail Record (IPDR) and SYS LOG of Network Address Translation (NAT)’. It requested the department to put these guidelines/requirements in abeyance and hold an industry discussion as per the practice followed by DoT in the past for revision of any CDR format.
Following the COAI-led appeal, DoT later scheduled a meeting and issued a letter vide which asked all the TSPs/ISPs to implement the said DoT guidelines by 31st May 2022.
In addition to these, the COAI also appealed to the DoT to bring down regulatory levies, both Universal Service Obligation (USO) and the license fee contribution. In a follow-up letter submitted to the DoT, the COAI requested the following:.
- USO levy should be abolished.
- However, if that is not possible immediately, the current levy should be reduced to 1 per cent from the present 5 per cent.
In another follow-up letter, the COAI requested that the license fee be brought down to 1 per cent at the earliest to cover admin costs by the DoT/Government.
Cloud-based service offering by new licensees
The COAI highlighted a key concern regarding spectrum access for new licensees looking to offer cloud-based services in a new submission. The association pointed out to the DoT that although Mobile Series and LRN codes have been allotted to an Access Service licensee to provide Internet Telephony Services, the said licensee does not have spectrum, access network and pan-India license. This has raised serious concerns in the industry as internet telephony, through mobile series, is akin to Mobile Services and will compete directly with mobile service providers who have invested in spectrum, access network and all-India licenses. This will lead to serious non-level playing field issues.
Structural and procedural reforms in the telecom sector
Based on the COAI’s recommendations, the Govt of India approved several structural and process reforms in the telecom sector, which are expected to protect and generate employment opportunities, promote healthy competition, protect the interests of consumers, infuse liquidity, encourage investment and reduce the regulatory burden on the TSPs.
Some of the major structural reforms are:
- Rationalisation of Adjusted Gross Revenue: Non-telecom revenue will be excluded on a prospective basis from the definition of AGR.
- Bank Guarantees (BGs) rationalised: Huge reduction in BG requirements (80%) against License Fee (LF) and other similar levies. There are no requirements for multiple BGs in diffrent Licensed Service Areas (LSAs) regions in the country. Instead, One BG will be enough.
- Interest rates rationalised/Penalties removed: Delayed payments of License Fee (LF)/Spectrum Usage Charge (SUC) now attract an interest rate of SBI’s MCLR plus 2 per cent instead of MCLR plus 4 per cent; interest compounded annually instead of monthly; penalty and interest on penalty removed.
- Henceforth, no BGs will be required to secure instalment payments for Auctions. The industry has matured, and BG’s past practice is no longer required.
- Spectrum Tenure: In future Auctions, the tenure of spectrum increased from 20 to 30 years.
- Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
- No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
- Spectrum sharing encouraged: Additional SUC of 0.5 per cent for spectrum sharing removed.
- To encourage investment, 100 per cent Foreign Direct Investment (FDI) under automatic route permitted in the telecom sector. All safeguards will apply.
Some of the major structural reforms are:
- Auction calendar fixed: Spectrum auctions to be normally held in the last quarter of every financial year.
- Ease of doing business promoted: Cumbersome requirement of licenses under 1953 Customs Notification for wireless equipment removed, replaced with self-declaration.
- Know Your Customers (KYC) reforms: Self-KYC (App based) permitted. E-KYC rate revised to only one rupee. Shifting from prepaid to post-paid and vice versa will not require fresh KYC.
- Paper Customer Acquisition Forms (CAF) will be replaced by digital storage of data. Nearly 300-400 crore paper CAFs lying in various warehouses of TSPs will not be required. A warehouse audit of CAF will not be required.
- SACFA clearance for telecom towers eased: DoT will accept data on a portal based on a self-declaration basis. Portals of other agencies (such as Civil Aviation) will be linked with the DoT portal.
These reforms come in the backdrop of the exceptional capability of India’s telecom sector in fulfilling the needs of a developing economy, despite the COVID-19 challenges, which resulted in a huge surge in data consumption, online education, work from home, and enhanced interpersonal connection through social media, virtual meetings, and such. The reform measures are expected to further boost the proliferation and penetration of broadband and telecom connectivity, in line with Hon’ble Prime Minister Shri Narendra Modi’s vision of a robust telecom sector. These reforms prioritise competition and customer choice, advocate for inclusive development, bring marginalised areas into the mainstream, and provide universal broadband access to connect the unconnected. The package is also expected to boost 4G proliferation, infuse liquidity, and create an enabling environment for investment in 5G networks.
The COAI Executive Council – headed by Chairman, Mr. Ajai Puri, Vice Chairman, Mr. P.K. Mittal, and comprising senior representatives from all member operators are, as always, an integral part of the progress that the association has been making, by consistently taking forward the respective discussions on a host of issues plaguing the telecom industry. The council was ably assisted by professional advice from the various Working Committees set up in COAI.
I express my heartfelt gratitude and deep appreciation to all the Committees and Working Groups, their Chairpersons and Vice-Chairpersons, for providing unstinted support and cooperation to the COAI. As always, I thank you all for taking the time out of your busy schedules to contribute to various industry issues and helping the association represent itself in a proficient and timely manner.
I would like to thank the COAI Chairman, Mr. Ajai Puri, and the Vice Chairman, Mr. P.K. Mittal, for their involvement and support in all the activities and initiatives of the association, despite the tough times posed by the pandemic. Their vigour enlivens India’s digital dreams and motivates us as an industry to jointly lead efforts that will enable our country to run at pace with the rest of the world. The cooperation and personal involvement of all senior members of the association have helped us uplift our work to the next level. I would like to thank everyone personally for engaging us in your time and resources. We would like to request your continued support and guidance in the future.
Last but not least, I would like to record my deep gratitude to the COAI Secretariat team, which has always provided excellent support and assistance in all our endeavours. I appreciate the willingness and dedication of all COAI teams in successfully executing every project that they are faced with.
In my last address, I highlighted the importance of making the right choice during times of crises. In the face of adversity, we decided to be better and serve better. And that made all the difference.
I thank everyone for giving us your best, keeping the engines running even during times of adversity, and consistently making efforts to shine brighter all the way through.
Lt. Gen Dr. S P Kochhar,
Director General, COAI