Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] A land of missed calls and revised deadlines

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Telecom pricing and challenges

Context

Telecom service providers have reduced the ringing limit for outgoing calls to 25 seconds. 

Call duration – costing

  • The sounds that alert us to incoming calls are not exactly costless. 
  • Every ring eats up radio frequency, and Indian telecom companies cannot be faulted for wanting to move towards international standards. 
  • So far the majority view was in favor of rings that last 30 seconds. It was lost in a haze once Reliance Jio set the cut-off limit for its outgoing calls to 25 seconds, and its rivals Airtel and Vodafone Idea followed suit. 
  • Such a short ring duration lends itself to accusations of being designed to induce callbacks from call recipients who are unable to respond in time. 
  • Under a “calling party pays” framework, an operator that originates a call must pay a termination fee to the network that answers. 
  • This means a net gain is made if more calls come in than go out to other networks. 
  • This intake constitutes a sizeable chunk of operator revenues.

Technology offers benefits

  • As technology pulls down the cost of carrying voice traffic, termination fees are to be phased out. 
  • The payment system is currently the subject of a policy tweak to set a sunset date for it. 
  • Packet-switched networks, such as those using 4G cellular technology, render these charges redundant. 

Challenges

  • It is expected that domestic telecom firms would have upgraded their grids and moved their legacy subscribers on these networks by the end of this year. 
  • The shift has been very slow. Every second cellular subscriber in India is still on either a 2G or 3G network. 
  • Only about half the handsets selling are 4G-enabled. 
  • Setting up new networks is one thing, getting subscribers to embrace them is quite another. Jio took just three years to expand its share of subscribers to around one-third of the total by bundling cheap tariff plans with elementary handsets hooked to its network. 
  • Bharti Airtel and Vodafone Idea were left vastly indebted by the large sums they paid for 2G and 3G spectrum. For them, pushing most of their subscribers to the latest available generation of mobile technology has been a far stiffer challenge.

Change in regulations 

  • The axing of termination fees was to mark India’s mass up-gradation
  • There is a need to address the incentive that operators have to resist change
  • If the status quo persists, millions of mobile subscribers could be left with outdated means of communication. 
  • The burden of high spectrum fees has already acted as a drag on the adoption of new technologies. 

Way ahead

  • As India gears up to roll out 5G services, telecom regulation must help the sector strike an optimal balance. 
  • The country has always taken a dual-lane approach to wireless telephony. A slow lane is alright, so long as the fast lane keeps up with the rest of the world.
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments