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

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

Online versus offlineop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3-Ensuring fair competition and dealing with the problem of predatory pricing.


Context

Any intervention to “correct” pricing essentially involves placing a higher weightage on the assumed losses of competitors/producers than on the consumer’s apparent gains. This is not a straightforward exercise.

Duopolies and scrutiny by the CCI

  • Duopolies in the most segment: The online marketplace or the platform/intermediation service market is now largely characterised by duopolies in most segments:
    • Amazon and Flipkart in e-commerce, Uber and Ola in transport, Zomato and Swiggy in food service, MakeMyTrip and Yatra in travel bookings.
    • Some niche players do exist in these segments, but by and large, the market has been carved up by large players.
  • Why CCI is scrutinising these companies? Several of these companies have come under the scrutiny of the Competition Commission of India (CCI).
    • What are the issues involved? The issues involved here have far-reaching ramifications for both online and offline market places. Some of the more contentious issues are:
    • Do such market structures restrict online competition?
    • Are the players engaging in predatory pricing?
    • If so, is it driving out both online and offline competition and does this adversely impact consumer welfare?
    • Is there a need for policy intervention, and, if so, what should be the underlying framework?

Lower barrier to entry not translating into greater competition

  • Market not working as per theory: In theory, the online market structure should facilitate greater competition given the lower barriers to entry. But this may not be the case.
    • Take-over: Most other firms in the segments mentioned above have either been taken over or have folded up.
  • What is the reason for the emergence of such marker structures
  • Positive feedback loop: One explanation for the emergence of these market structures is that as companies grow, with more users coming on board these platforms, they benefit from what CCI calls positive feedback loop.
    • This leads to market concentration.
    • Difficulties for new players: Given the network effects, which are common in digital spaces, it becomes difficult for new players to enter these spaces, and gain market share as there isn’t much space for many such networks.
  • Capital intensive market: Another possible explanation is that, contrary to perception, the online space is highly capital intensive.
    • Deep pockets are required to fund the discounts to get customers on board initially.
    • Such market structures are more likely in capital deficit countries like India.
  • Incumbents restricting new entrant: Incumbents, as in other sectors, may also engage in various strategies to restrict entry and thus competition.
    • Even small actions by these platforms coupled with the network effects can adversely impact competition.

Predatory pricing-issues involved in it

  • Allegations of predatory pricing driving out the competition: Many allege that these two-sided online platforms engage in predatory pricing or below-cost pricing either by funding it themselves (deep pockets) or by squeezing producers.
    • This drives out the competition — both online as well as offline.
    • Predatory pricing is anti-competition, to begin with.
    • How it is harmful to the customers? While consumers do benefit in the short run, once the competition is driven out, the platform starts raising prices to recoup previous losses.
    • But is it that straightforward?
  • What are the issues involved in predatory pricing?
  • First- Assessing whether a platform is engaged in predatory pricing.
    • In India, it is defined as price falling below average variable cost — may not be a straightforward exercise.
    • Why it is not a straight forward exercise? The dynamics of online pricing (prices change over time), their unique cost structures — in such two-sided platforms, prices/costs on both sides should be seen in conjunction — as well as the impact of economies of scale and organisational efficiency in lowering costs, all need to be factored in.
    • Discount for clearing inventories: Besides, one would also have to take into account that even offline firms engage in deep discounting to clear inventories.
    • As do both online and offline firms to acquire customers in the early stages of their business.
  • Second-The impact of such pricing strategies on competition and on consumer welfare must be carefully assessed.
    • Driving out competitors is not equal to driving out the competition: It is quite likely that once the competition is eliminated and the platform starts to raise prices, new players will enter the market, attracted by higher prices.
    • Driving out competitors may not be the same as driving out the competition — though the extent to which new firms are able to enter the market will depend on the degree to which barriers to entry exist.
    • Concerns of recovering the losses: Platforms will be mindful that losses will be hard to recover, and may not engage in below-cost pricing to drive out competitors for extended periods.
    • Consumers are unlikely to lose out as prices are likely to remain low.
  • Third- Possibility of collusion
    • There is also an argument for closer examination of such market structures because of the possibility of collusion.
    • Customers moving towards cheaper options: In most such markets, as the consumer has little to differentiate between the two platforms, it is the price that sets them apart.
    • Consumers tend to gravitate towards the cheaper option. This ensures continuous competition between the major players to offer low prices.
    • Possibility of customer left with no option: It is possible that at some point, the players will find it in their interest to venture into some sort of agreement that allows both of them to survive, rather than be engaged in a race to the bottom — as has seemingly happened in the telecom sector.
  • Fourth- Linking predatory pricing with abuse of dominant market position must be reexamined.
    • The dominant position is not always linked with predatory pricing: As the experience of the telecom sector shows, a dominant position may not be a prerequisite for predatory pricing.
    • Accepting this argument would imply that if regulatory intervention is required to check predatory pricing, it could kick in before market power or dominance is established.
    • Taking into account deep pockets: Alternatively, the definition of market dominance could be expanded to take into account deep pockets.

Conclusion

  • Set of guidelines instead of the fixed framework: Any intervention to “correct” pricing essentially involves placing a higher weightage on the assumed losses of competitors/producers than on the consumer’s apparent gains. This is not a straightforward exercise. Having a fixed predetermined framework is unlikely to be helpful. Instead, it would be more useful to have a set of guiding principles based on which regulatory intervention, if required, can be undertaken.
  • Safeguarding competition not competitors: Competition policy should be driven by safeguarding competition, not competitors. It should seek to bring about greater transparency in pricing and reduce information asymmetry.

 

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

Back in news: Adjusted Gross Revenue (AGR)Priority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : AGR

Mains level : AGR disputes of Telecom companies


The Supreme Court came down heavily on the Department of Telecommunications (DoT) for issuing a notification that asked for no coercive action against telecom companies even though they had not paid the adjusted gross revenue (AGR) dues by the stipulated deadline.

What is AGR?

  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • It is divided into spectrum usage charges and licensing fees.

What does SC order on AGR mean?

  • The order by the top court means that the telecom companies will have to immediately clear the pending AGR dues, which amount to nearly Rs 1.47 lakh crore.
  • Vodafone Idea, which has to pay up nearly Rs 53,000 crore, faces the prospect of shutting down business.
  • Bharti Airtel, which faces a payout of more than Rs 21,000 crore, could also be in trouble for not paying the AGR dues on time.
  • Other than the telcos, non-telecom companies could also be facing huge payouts individually, which amount to total of Rs 3 lakh crore.

What exactly did the government notification say?

  • The Licensing Finance Policy Wing of the DoT last month directed all government departments to not take any action against telecom operators if they failed to clear AGR-related dues as per the Supreme Court’s order.
  • The order came as a huge relief for operators — mainly Bharti Airtel and Vodafone Idea — that would have otherwise faced possible contempt action for not paying dues by the deadline that ran out on that same day.

No more relief to telecoms

  • Bharti Airtel and Vodafone Idea together owe the telecom department Rs 88,624 crore.
  • Prior to the DoT order restraining coercive action, the companies had told the government that they would wait for the outcome of the Supreme Court hearing.
  • Reliance Jio paid up its dues of Rs 195 crore on January 23.
  • As things have turned out, however, the companies have got no relief from the Supreme Court.

What is the background of SC’s AGR order?

  • On October 24, 2019, the court had agreed with DoT’s definition of AGR, and said the companies must pay all dues along with interest and penalty.
  • Bharti Airtel and Vodafone Idea had tried to persuade DoT to relax the deadline and, after failing, moved the court seeking a review of its judgment.
  • The court dismissed the review petition in mid-January, and also did not extend the deadline for paying AGR dues.
  • It had, however, agreed to hear the companies’ modification plea.

Where does the government stand in this situation?

  • The payout by telecom and non-telecom companies is likely to lead to windfall gains for the central government, which could help it close some of the fiscal deficit gap for the current financial.
  • At the same time, however, the government will be under pressure to ensure that the telecom market does not turn into a duopoly if Vodafone Idea does indeed decide to shut shop.
  • It will also have to manage the payouts to be done by non-telecom companies as most of them, such as Oil India, Power Grid, Gail, and Delhi Metro Rail Corporation are public sector units.

What does this situation mean for customers and lenders?

  • If Vodafone Idea does exit, an Airtel-Jio duopoly will be created, which could lead to bigger bills, considering it was the cutthroat competition in the sector that made mobile telephony and Internet almost universally affordable.
  • The AGR issue has triggered panic in the banking industry, given that the telecom sector is highly leveraged.
  • Vodafone Idea alone has a debt of Rs 2.2 lakh crore that it has used to expand infrastructure and fund spectrum payments over the years.
  • The mutual fund industry has an exposure of around Rs 4,000 crore to Vodafone Idea.

Assist this newscard with:

Explained: Adjusted Gross Revenue (AGR) in Telecom Sector

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

Missed callop-ed of the day

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 3- AGR issue and its impact on the telecom sector of the country.


Context

As the dust settles after the Union budget and the Supreme Court’s decision to not provide relief to telcos from their licence fee liabilities, it is an appropriate moment to step back and examine how we got here.

The issue over the definition of AGR (Aggregate Gross Revenue)

  • What is AGR issue: Since the New Telecom Policy of 1999 (NTP 1999), operators were required to pay a percentage of their AGR to the government as licence fees instead of a one-time licence fee.
    • License fee based on earnings: This was done in exchange for moving operators from fixed licence fee-based on irrationally exuberant bids they had made in the mid-nineties-to a regime that determined licence fee based on revenue earned, thereby de-risking the obligation.
    • Why it matters? What constitutes AGR is important for the purpose of the computing licence fee and thousands of crore are dependent on this.
  • Consequences of ambiguity over the definition of AGR: Bundling – a pervasive phenomenon in most telecom markets have not taken off in India.
    • What is bundling? Product bundling is a marketing strategy that involves offering several products and/or services for sale as one combined product.
    • The fear is that handset sales will also come under the purview of AGR. Handsets, it could still be argued are part of the service offering.
    • Dividend on earning is considered as the part of AGR: Interest and dividend earnings on investments have also been included in AGR.

Unfair practices and cancellation of licences by the court

  • Controversy over conversion charges: In 2003, “limited” mobility service was converted into a fully mobile service with a one-time payment of Rs 1,658 crore as “conversion” charges, generating controversy. It was labelled as a “back door entry” to full mobility.
  • Disguising international calls as domestic: Around the same time, the DoT used to levy a fee of Rs 4.75 per minute on international calls known as “access deficit charge” (ADC) to fund universal coverage. It is well known that an operator disguised international calls as domestic to bypass ADC.
  • Showing call revenue as internet services revenue: For some time, internet services attracted lower or no licence fee and it became expedient for operators to indulge in license fee “arbitrage” by showing more revenue from internet services.
  • Inflating subscriber numbers: Another manoeuvre was to inflate subscriber numbers to gain access to scarce spectrum in the days when fresh spectrum was administratively assigned based on subscriber numbers.
  • First come first serve policy: Finally, the shameful spectacle was the battle fought by operators to jump the queue to deposit earnest money for gaining rights over the spectrum that was oddly sought to be assigned by a method called “first come first served” and whose definition itself was quite elastic.
  • Cancellation of licence by the Court: Thereafter, in the litigation that inevitably followed, the Court cancelled 122 telecom licences and mandated allocation of spectrum by auction.

Conclusion

  • Erosion of trust between the public and private sector in general and in the telecom sector, in particular, has been a negative externality of the reform process.
  • Restoration of trust between public and private sector is necessary: In this context, the appeal made by the finance minister during her budget speech for the restoration of “vishwaas” between the public and private sectors and between citizens and government is critical
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[pib] UNCITRALIOCR

Note4Students

From UPSC perspective, the following things are important :

Prelims level : UNCITRAL

Mains level : Not Much


 

An International Arbitration Tribunal has dismissed all claims brought against  India in entirety. The arbitration arose out of the cancellation of Letters of Intent for the issuance of telecom licences to provide 2G services in five telecommunications circles by reason of India’s essential security interests.

UNCITRAL

  • The UN Commission on International Trade Law (UNCITRAL) is a subsidiary body of the U.N. General Assembly responsible for helping to facilitate international trade and investment.
  • Established by the UNGA in 1966, UNCITRAL’s official mandate is “to promote the progressive harmonization and unification of international trade law” through conventions, model laws, and other instruments that address key areas of commerce, from dispute resolution to the procurement and sale of goods.
  • UNCITRAL carries out its work at annual sessions held alternately in New York City and Vienna, where it is headquartered.
  • The Tribunal constituted in accordance with the UNCITRAL Arbitration Rules 1976 is seated at the Hague, Netherlands, and proceedings are administered by the Permanent Court of Arbitration.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Telecommunication Consumers Education and Protection Fund (TCEPF)Prelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : TCEPF, TRAI

Mains level : Telecom regulation in India


The Telecom Regulatory Authority of India (TRAI) has informed that telecom service providers will need to deposit all unclaimed money of consumers, including excess charges and security deposit, in the Telecommunication Consumers Education and Protection Fund (TCEPF).

Telecommunication Consumers Education and Protection Fund (TCEPF)

  • The TCEPF Regulations, 2007 have been amended to provide the basic framework for depositing unclaimed money of consumers by service providers, maintenance of the TCEPF and other related aspects.
  • Any unclaimed / unrefundable amount belonging to consumers in the TCEP fund will be utilized for the welfare measures of the consumers.
  • With this amendment, service providers will deposit any unclaimed consumer money of any form such as excess charges, security deposit, plan charges of failed activations, or any amount belonging to a consumer, which service providers are unable to refund to consumers.

Why such move?

  • The TRAI observed that there is a need to bring clarity among service providers in depositing money which they are unable to refund to the consumers.
  • While some service providers were depositing money only on account of excess billing revealed in the audit, others were depositing unclaimed money such as security deposits and plan charges of failed activations.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Millimeter SpectrumPrelims Only

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Millimeter Spectrum

Mains level : Rolling out of 5G services in India


The DoT plans to auction the 24.75 – 27.25 gigahertz (GHz) spectrum in the 5G band in March-April 2020.

Millimeter Spectrum

  • The new spectrum under the 5G band called the ‘millimeter-wave bands’ is separate from the 8,300 megahertz (MHz).
  • The millimeter-wave band or extremely high-frequency frequency spectrum is mainly designed for usage in airport security scanners, closed-circuit television, scientific research, machine-to-machine communication, and military fire control.

What’s so special with this MM spectrum?

  • As the wavelength becomes smaller, the cell size becomes less, which is the footprint of the relay station. This will be used more by the industry.
  • If we you already have fiber connection and want to reach houses, this will be through millimeter bands.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Govt has to ensure digital India does not miss the busop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Telecom sector - impact of policies


Context

The telecommunications sector is one of the most progressive in the world, in terms of both development and outcomes. 

The success of the telecom sector

    • It rides on increasing mobile penetration, declining tariffs, increasing competition, and the evolution of wireless technologies. 
    • Telecom has surged ahead of other infrastructure-heavy sectors. 
    • This success can be attributed to a large addressable market along with substantial private sector participation, technological innovations and an enabling institutional and regulatory environment.

Challenges

    • In a judicial pronouncement in 2012, the Supreme Court ordered the cancellation of 122 telecom licences in the 2G scam case.
    • Then there’s the phase of hyper-competition unleashed by a new entrant. This led to the rapid consolidation – a virtually 3+1-player market, bankrupt telcos, lakhs of lost jobs, red balance sheets and worried lenders/investors. 
    • Now the Supreme Court judgement on licence fee and spectrum charges has taken away all those hopes.

Latest judgement

    • Court held that the definition of gross revenue mentioned in the licence agreement is sacrosanct and cannot be reviewed or decided by TDSAT or TRAI. 
    • It held that the “gross revenue of the licence” is equal to the “total revenue of the licensee company”. 
    • It said all revenue arising out of non-telecom activities has to be classified as “miscellaneous revenue” and included in the total revenue of the company.
    • It affects several companies that hold ISP, national long-distance or international long distance licences, or are MSO/cable operators.

Impact of the judgement

    • The definition of revenue is the same for all telecom licences. 
    • All companies such as GAIL, Power Grid, RailTel, Delhi Metro, Oil India Ltd—that have taken the telecom licence for their own captive use(not for a commercial purpose) would be liable to pay huge sums as licence fee on the revenue earned from its non-telecom operations.
    • Calculations suggest that the impact could be upwards of ₹2 trillion on these non-telecom entities alone. 
    • Also, there would be an impact close to ₹93,000 crores for mobile operators.

Alternatives

    • DoT can waive these charges, fully or partly. If it decides to go ahead and recover these charges from all operators, the industry will face an unprecedented crisis.
    • TRAI always held that revenue from operation of non-telecom services should not attract licence fees. It recommended it to the government in 2006 and in 2015. 
    • The government should review the levies on the operators. This might soften the blow on a promising industry.
    • The government should take a holistic view so as to ensure Digital India does not get off track.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[oped of the day] One Step Forward, two steps back for telecom sectorop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : Telecom sector - policy issues


Context

Policy uncertainty is not good for investment. Despite that caution, the Indian telecom sector has been the beneficiary of vast amounts of investments from both domestic and foreign sources. 

Telecom sector

    • Investment – The magnitude of foreign investment in the telecom sector since the 1995 liberalization stands at $40 billion.
    • Policy – The National Telecom Policy (NTP) of 1994 acknowledged for the first time the need to create a world-class telecommunications infrastructure, and the centrality of private investment to achieve. 

Regulator

    • Inviting private investment without an independent regulator was flawed thinking. 
    • The Department of Telecommunications (DoT) had also devised a regime that was skewed in its favour and was essentially anti-private sector. 
    • Litigation became the norm. Eventually, the Supreme Court pronounced that private investments cannot happen without a regulator. 
    • Excessive and severe discord between DoT and TRAI  led to litigation, which in turn prompted the government to dissolve TRAI and its adjudicatory powers were given to a special tribunal for telecom, TDSAT, which came into being in 2000.

Spectrum

    • Spectrum assignment has been another instance of policy uncertainty. Until 2001, the spectrum was assigned through auctions via a contrived administrative procedure linked to subscribers. 
    • This created perverse incentives to game the system during 2003-08. 
    • The more subscribers you could show on your network, the more spectrum you were awarded. 
    • Certain operators inflated subscribers to gain spectrum. Others lobbied to jump the queue when the first-come, first-served criterion was selected as the assignment method. 
    • The Supreme Court came down on the impropriety in assigning spectrum and cancelled 122 telecom licences in 2012. 
    • It justified its judicial overreach in the larger public interest and pronounced that assigning spectrum to be done through an auction. 
    • Auctions continue to be the norm today and have become a millstone around the sectors neck.

Licence fees

    • The definition of sector revenue is linked to licence fees. 
    • Because telecom operators have to pay a percentage of adjusted gross revenue (AGR) to the government as licence fee, its accurate calculation is of vital importance. 
    • Its genesis dates back to 1999 when the market contributed to the exaggerated bids by new entrants.
    • Unable to honour their bids, operators were granted a migration package in which licence fee became a percentage of revenue. 
    • The deal has now become a bone of contention between DoT and operators. 
    • The department contends that for AGR calculations all revenues earned by operators must be included. Operators reason that AGR should only include revenue from telecom services. 
    • The Supreme court had sided with DoT creating a $19 billion burden on the sector. 

Way ahead

    • The endless litigation reflects an institutional malaise and deep trust deficit between the private and public sectors.
    • Unless we resolve this, telecom will not live up to its promise and will impair our digital future.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Explained: Adjusted Gross Revenue (AGR) in Telecom SectorExplained

Note4Students

From UPSC perspective, the following things are important :

Prelims level : AGR

Mains level : Slowdown in the Telecom sector



  • In a strongly-worded order, the Supreme Court of India upheld the Department of Telecom (DoT)’s interpretation of “adjusted gross revenue” (AGR).
  • This came as a huge blow to telecom service providers.
  • Following the order, the telcos are now staring at dues of an estimated ₹1.4 lakh crore, which needs to be paid to the government within three months.
  • Most industry players and analysts have argued that the payout of the huge amount could be the final straw for the already distressed sector.

What is AGR?

  • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
  • It is divided into spectrum usage charges and licensing fees, pegged between 3-5 percent and 8 percent respectively.

Why is AGR important?

  • The definition of AGR has been under litigation for 14 years.
  • While telecom companies argued that it should comprise revenue from telecom services, the DoT’s stand was that the AGR should include all revenue earned by an operator, including that from non-core telecom operations.
  • The AGR directly impacts the outgo from the pockets of telcos to the DoT as it is used to calculate the levies payable by operators.
  • Currently, telecom operators pay 8% of the AGR as licence fee, while spectrum usage charges (SUC) vary between 3-5% of AGR.

Why do telcos need to pay out large amounts?

  • Telecom companies now owe the government not just the shortfall in AGR for the past 14 years but also an interest on that amount along with penalty and interest on the penalty.
  • While the exact amount telcos will need to shell out is not clear, as in a government affidavit filed in the top court, the DoT had calculated the outstanding licence fee to be over ₹92,000 crore.
  • However, the actual payout can go up to ₹1.4 lakh crore as the government is likely to also raise a demand for shortfall in SUC along with interest and penalty.
  • Of the total amount, it is estimated that the actual dues is about 25%, while the remaining amount is interest and penalties.

Is there stress in the sector?

  • The telecom industry is reeling under a debt of over ₹4 lakh crore and has been seeking a relief package from the government.
  • Even the government has on various occasions admitted that the sector is indeed undergoing stress and needs support.
  • Giving a ray of hope to the telecom companies, the government recently announced setting up of a Committee of Secretaries to examine the financial stress in the sector, and recommend measures to mitigate it.

Issue of lower tariff

  • Currently, telecom tariffs are among the lowest globally, driven down due to intense competition following the entry of Reliance in the sector.
  • The TRAI examines the merits of a “minimum charge” that operators may charge for voice and data services.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Can the government intercept WhatsApp?Explainedop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Over the Top services; End to End encryption

Mains level : State surveillance; Social Media


News

The TRAI is studying the possibility of bringing platforms such as WhatsApp under the ambit of “lawful interception”.

Lawful Interception

  • Lawful interception of online communications platforms such as WhatsApp, Skype, Signal or Telegram has been a long-running debate.
  • It has ranged governments and regulators across the world against technology companies and privacy activists. 
  • The authorities want such platforms to provide access to messages, calls, and their logs to law-enforcement agencies to aid them with investigations. 
  • India, too, has made demands for traceability of communications from instant messaging platforms.

Why is TRAI looking at the lawful interception of online messaging apps?

  • Issue of OTTs – The telecom sector watchdog has been carrying out consultations to build a regulatory framework for over-the-top service providers (OTTs).
    • OTTs are the platforms that use the infrastructure of traditional telecom companies like the Internet to offer their services. 
    • TRAI has been looking at the regulation of OTTs since 2015 when mobile companies first raised concerns over services such as WhatsApp and Skype causing loss of revenues by offering free messaging and call services.
  • Regulatory regime – The other argument made at the time was that these services do not fall under the licensing regime prescribed by the Indian Telegraph Act, 1885, and operated in a regulatory dark spot.
  • There are concerns about the lack of a level playing field between telecom companies and OTT service providers, including the economic aspect. 
  • With the boom of data consumption in the country over the last two or three years, the regulator began looking at the security facet of the regulatory imbalance between the two kinds of players. 
  • While telecom players are subjected to lawful interception as per the telegraph law, OTT platforms, as they are not licensed, are not subject to interception by law enforcement agencies.

How will the regulator proceed with the proposal now?

  • TRAI will submit its views to the Department of Telecommunications (DoT), which will decide on the next course of action. 
  • Currently, the regulator is studying global practices as far as a lawful interception on online platforms is concerned. 
  • It is also looking into whether other regulators and authorities have been provided any facilities for interception of communications, and could suggest that the platforms should provide the same facilities to the Indian government.

Under which laws are telecom firms currently subject to lawful interception?

  • The Indian Telegraph Act, 1885 states that on the occurrence of any public emergency, or in the interest of public safety, 
    • the central government or a state government can take temporary possession as long as the public emergency exists or the interest of the public safety requires the taking of such action 
    • of any telegraph established, maintained or worked by any person licensed under the Act. 
  • This mandates telecom companies to provide access to messages, calls, and logs of these in case a court order or a warrant is issued. 
  • However, the government is not relying on The Telegraph Act to meet this objective. It wants the platforms to come up with a solution to enable traceability.

So, are messages sent and received on these platforms not traceable?

  • Apps such as WhatsApp, Signal, Telegram, etc. claim to provide end-to-end encryption of their messages. 
  • This has caused some uncertainty among the authorities on how they can seek access to messages.

The case of WhatsApp

On the FAQ page on its website, WhatsApp states: 

  • We will search for and disclose information that is specified with particularity in an appropriate form of the legal process and which we are reasonably able to locate and retrieve. 
  • We do not retain data for law enforcement purposes unless we receive a valid preservation request before a user has deleted that content from our service.
  • It also says that in the ordinary course, WhatsApp does not store messages once they are delivered. 
  • Undelivered messages are deleted from servers after 30 days. 
  • As per the WhatsApp Privacy Policy, they may collect, use, preserve, and share user information if it is reasonably necessary to
    • keep users safe
    • detect, investigate, and prevent illegal activity
    • respond to legal process, or to government requests
  • They also offer end-to-end encryption for the services. End-to-end encryption means that messages are encrypted to protect against WhatsApp and third parties from reading them.

And what is the situation elsewhere?

  • Currently, there is no jurisdiction anywhere in which messaging apps have been known to provide access to their messages. 
  • Pressure on such services to provide access for law-enforcement purposes has been rising everywhere. 
  • The United States Department of Justice has made fresh arguments for access to encrypted communications. The New York Times reported that Attorney General William P Barr has written to Facebook CEO Mark Zuckerberg, pointing out that companies should not “deliberately design their systems to preclude any form of access to content even for preventing or investigating the most serious crimes”.
  • In India, Law and IT has repeatedly stressed the need to be able to trace messages to prevent serious crimes. 
  • The Indian government has conceded that encrypted messages may not be accessible. 
  • It has asked the platforms to provide the origin of messages that could possibly incite violence or other mischievous acts.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

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

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

[op-ed snap] Trai’s attempt to review tariffs raises concernsop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing much

Mains level : TRAI NTO on channel subscriptions


CONTEXT

Discovery Communications filed a writ petition in the Delhi High Court against TRAI’s new consultation paper on tariffs regarding broadcasting and cable services. 

Background

  • It seeks a stay on the consultation paper saying that it lacks objectivity, transparency and fairness of approach. 
  • Discovery argues the consultation paper is based on the assumption that television broadcasters are responsible for manipulating and distorting pricing of channels, thereby affecting consumer choice.
  • TRAI is attempting to review the six-month-old new tariff order (NTO), which allowed consumers to choose their channel on an à la carte basis with broadcasters having to declare the maximum price of each channel separately. 
  • Several research studies found that instead of lowering the monthly cable and DTH bills for the consumers as was intended, the new framework led to an increase in monthly charges.
  • Several broadcasters raised concerns about the new consultation paper. They say that the Trai’s move favours the distribution platform operators (DPOs) such as cable and DTH services. 
  • They feel that under the new tariff order the distribution platforms have gained the most as they get a fixed network capacity fee (NCF) of ₹130 for 100 standard definition (SD) channels and ₹20 for the next slab of 25 SD channels. 
  • The new consultation seeks to review broadcasters’ bouquets to check misuse of flexibility in pricing. 
  • By regulating the channel pricing, it is not allowing broadcasters to monetize their IPR
  • Trai assumes that à la carte is the preferred choice among consumers, although it offers no research by way of evidence.

Broadcasting and NTO

  • Broadcasting in India has always been a standoff between broadcasters and DPOs, and the DPOs have always been winning. 
  • Trai, as well as the ministry of information and broadcasting, have always seen their role as controlling broadcasters, never the DPOs.
  • DPOs have other advantages, too. If you have to be part of the first 100 free-to-air (FTA) channel bouquet of a DPO, you have to pay a carriage fee.
  • Also, they are pushing their own bouquets onto the consumers. 
  • At present no distributor platform has the capability to offer complete à la carte channel choice involving various permutations and combinations for each and every consumer. 
  • The new tariff order robs a consumer of his chance to discover new content as he was getting many channels for a very low monthly fee.
  • The new tariff order and the new consultation paper may kill the smaller channels. There is nothing wrong if weaker channels piggyback on stronger ones. 

CONCLUSION

Consumer should get actual choice and be able to pay only for what he watches. The revised tariff order seeks to make amends, but Trai has not acknowledged the mess it created.

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

Explained: Huawei controversy and 5G rollout in IndiaExplained

Note4Students

From UPSC perspective, the following things are important :

Prelims level : 5G technology

Mains level : Huawei Row


  • The telecom minister has said that India would conduct field trials for 5G telephony in the first 100 days of the new government.
  • One question that has been asked is whether Chinese equipment manufacturer Huawei will be able to participate in the trials.
  • Huawei was blacklisted by the US government for American companies to do business with after it was alleged that the company shared data with the Chinese government through the backdoor.

Why did US blacklist Huawei?

  • Huawei is the world’s largest maker of telecommunications equipment and the No. 2 vendor of smartphones, ahead of Apple Inc.
  • However, notwithstanding its dominance, the US has effectively banned Huawei from selling its products after a 2012 congressional report stated that Huawei could be a security risk.
  • According to the US, Huawei’s owners have close links with the Chinese military and, as such, the company cannot be trusted with data.
  • The treatment of Huawei has become a massive reason for further straining the already fraught diplomatic relations between the US and China.

India stand on the Huawei controversy

  • Following Huawei’s blacklisting several countries were asked to take a stand on whether or not to allow the company to operate.
  • Certain countries such as the UK did not follow the US and cited benefits to operators from Huawei’s cost-efficient technology as the reason behind not banning the firm.
  • While India is yet to take a stand on whether or not to allow Huawei in 5G trials, officials at the telecom department have indicated that a decision will be taken in consultation with the MHA and MEA.
  • Huawei, however, has said that it is ready to sign a “no-backdoor” agreement with the Indian government and telecom companies to ensure that no snooping is allowed on its network.

Where does India stand on the rollout of 5G vis-a-vis other countries?

  • Deliberations are still on whether to give spectrum for 5G in the 25 GHz and 28 GHz bands.
  • This is one of the factors causing a delay in the auction of airwaves necessary for 5G deployment.
  • In February last year, Airtel and Huawei conducted a lab trial for 5G during which a user throughput of 3 Gbps was achieved. However, not much has moved since then.
  • A committee of the telecom ministry recently cleared the proposal to allow few Indian companies to conduct 5G spectrum trial.

What happens after field trials are conducted?

  • Field trials allow operators and equipment makers to prove that the network they have built in a laboratory also works outside in a field.
  • Even after conducting the field trials, operators will have a long way to go before commercial rollout primarily because of the lack of availability of the necessary spectrum.
  • Some telecom companies, however, have questioned the need for rolling out 5G in India given that focus is still on the propagation of 4G services, especially in the hinterlands of the country.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Caution on spectrumMains Onlyop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : Auction of spectrum may not be a good idea.


CONTEXT

  • On Monday, the Telecom Regulatory Authority of India (Trai) reiterated its stance on the issue of spectrum pricing, including that of 5G, for the upcoming auctions.
  • This was in response to the Digital Communications Commission, the apex decision-making body of the Department of Telecommunications, which had sought a review of the Trai’s August 2018 recommendations on the auction of spectrum.

Reviewing the Trai’s recommendations

  • The commission’s call for reviewing the Trai’s recommendations came amid concerns over the financial health of telcos, and worries that demand for spectrum is likely to be muted as consolidation in the sector has effectively left only three private telecom service providers.
  • But, in its response, Trai has stayed with its earlier position, stating that all relevant factors, such as the methodology, assumptions, as well as developments between the spectrum auction held in October 2016 and its recommendations, released in August 2018, have been considered.

Telecom sector and revenue

  • Over the years, the telecom sector has been a major source of revenue for the government.
  • And at a time when the Centre is struggling to meet its revenue targets, higher proceeds from spectrum auctions could provide the much-needed boost to government coffers.
  • But the temptation of revenue maximisation should be resisted when there are legitimate concerns over the financial health of the sector.

Lessons from the last bidding

  • Aggressive bidding by telcos in the 3G auctions in 2010 marked a turning point in the industry’s fortunes.
  • As a result of the pile-up in debt, highly indebted telcos exercised restraint in the 2016 spectrum sale, with the government realising only Rs 65,789 crore as revenue against Rs 5.63 trillion (base price) worth of spectrum that had been put up for sale.
  • The price war, which began in September 2016, only exacerbated the already precarious financial position of incumbents.
  • Their deteriorating finances have also taken a toll on the government’s revenue. In 2018-19, the Centre was able to collect only Rs 39,245 crore through licence fees and spectrum usage charges, as against the initial target of Rs 48,661 crore.
  • In comparison, it had collected Rs 70,241 crore in 2016-17.
  • While average revenues per user (ARPUs) have risen of late, a turnaround is still some time away.
  • With precarious finances, a repeat of the 2016 auction is a possibility.

Implications for Telecom Sector

  • At such high prices, cash-strapped operators will find it difficult to bid, without sinking even more into debt.
  • This could impact their capital expenditure, leaving them with fewer resources to invest in towers and fibre optics.
  • Acknowledging the issues plaguing the sector, the telecom minister, Ravi Shankar Prasad, has recently set up a panel to rationalise levies, and to look into other issues.
  • While it might be difficult to set aside Trai’s recommendations, the government would do well to think carefully through the implications of the recommendations, before rushing to auction high-priced spectrum.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

5G network in IndiaPriority 1

Note4Students

From UPSC perspective, the following things are important :

Prelims level : 5G and its comparison to 4G and 3G

Mains level : Read the attached story



  • Recently the Union Communications Minister has announced that the government will be holding an auction for spectrum, which includes airwaves that will be used to offer 5G or fifth-generation services.
  • While some countries such as South Korea and the U.S. have begun rolling out commercial 5G services, India is yet to begin trials for.
  • India is targeting 2020 as the launch year for 5G in the country.

What is 5G?

  • It is the next generation cellular technology that will provide faster and more reliable communication with ultra low latency.
  • A government panel report points out that with 5G, the peak network data speeds are expected to be in the range of 2-20 Gigabits per second (Gbps).
  • This is in contrast to 4G link speeds in averaging 6-7 Megabits per second (Mbps) in India as compared to 25 Mbps in advanced countries.
  • Once 5G becomes commercial, users will be required to change their current devices in favour of 5G-enabled ones.
  • However, it is likely that the primary use of the technology will go beyond delivery of services on personal mobiles devices.

Utility of 5G

  • 5G is expected to form the backbone of emerging technologies such as the Internet of Things (IoT) and machine to machine communications.
  • It would be supporting a much larger range of applications and services, including driverless vehicles, tele-surgery and real time data analytics.
  • One of the primary applications of 5G will be implementation of sensor-embedded network that will allow real time relay of information across fields such as manufacturing, consumer durables and agriculture.
  • 5G can also help make transport infrastructure more efficient by making it smart.
  • 5G will enable vehicle-to-vehicle and vehicle-to-infrastructure communication, making driverless cars, among other things, a reality.
  • The ultra low latency offered by 5G makes the technology desirable for such use cases. Latency is the amount of time data takes to travel between its source and destination.

Economic impact

  • 5G is expected to create a cumulative economic impact of $1 trillion in India by 2035, according to a report by a government-appointed panel.
  • According to a separate report by telecom gear maker Ericsson, 5G-enabled digitalization revenue potential in India will be above $27 billion by 2026.
  • Additionally, global telecom industry GSMA has forecast that India will have about 70 million 5G connections by 2025.

What about spectrum auction?

  • The government plans to undertake spectrum auction in the current calendar year.
  • In a first step towards preparing for these auctions, the Telecom Regulatory Authority of India (TRAI) had in August last year recommended that entire available spectrum be put to auction in the forthcoming sale.
  • As a result a total of 8,644 MHz of spectrum will be put on sale, making it the largest ever such auction.
  • For 5G spectrum, i.e. the spectrum in 3300-3600 MHz which will be put out for bids for the first time, the regulator has recommended a pan-India reserve price of about Rs. 492 crore per MHz for unpaired spectrum.

Needs infrastructural revamp

  • Besides the spectrum, 5G will require a fundamental change to the core architecture of the communication system.
  • Simply upgrading the existing Long Term Evolution core will not be able to support the various requirements of all 5G use cases.
  • A report on 5G by Deloitte stated that it is anticipated that the industry might require an additional investment of $60-70 billion to seamlessly implement 5G networks.
  • With the entry of 5G into the Indian networks, the earlier generation mobile technologies (2G, 3G and 4G) will continue to remain in use and that it may take 10 or more years to phase them out.

Way forward

  • It is widely accepted that 5G’s value for India may be even higher than in advanced countries because of the lower levels of investments in physical infrastructure.
  • 5G may offer ‘leapfrog’ opportunities by providing ‘smart infrastructure’ that offers lower cost and faster infrastructure delivery.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Saving BSNLMains Onlyop-ed snap

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Nothing Much

Mains level : There is a need to revive BSNL to strenghten telecom Sector.


CONTEXT

The Centre must take immediate steps to revive Bharat Sanchar Nigam Ltd if it wants to achieve the objective of reaching 100 per cent tele-density in rural areas and keep telecom services affordable for the common man.

Need to revive BSNL

1. Counter to any monopolistic venture – While private operators have taken over the market with billions of dollars in investments and cost-efficient operations, India’s telecom consumers need a public sector entity like BSNL as an effective counter to any monopolistic venture that may arise due to the ongoing financial stress in the sector.

2.Less number of players – From as many as nine operators, intense competition and below-cost pricing have reduced the number to just three players.

3. The pressure to increase tariffs – The larger surviving operators, who have so far managed to sustain their operations, are under pressure to increase tariffs.

4. Fear of shut down of telecom networks – The highly leveraged balance sheets of these operators could also force them to slow down the rollout of next-generation data networks to rural and economically unviable areas.

5. Catering rural area – In this context, it is important to have a strong PSU telecom company which will not only prevent private players from increasing tariffs as an easy means to escape financial stress but also ensure that rural consumers are catered to.

Past Efforts to revive PSUs

  • There have been many attempts earlier to improve the company’s operations, but most of them remain on paper.
  • Sam Pitroda’s Committee – For example, a committee headed by Sam Pitroda, then advisor to the Prime Minister, offered a 15-point plan to turnaround the PSU, including trimming staff, divesting 30 per cent equity, adopting a managed services model for its various operations and inducting a chief executive from the private sector. This plan has not been acted upon.
  • Time is running out, though. BSNL has, in 14 years, moved from Navratna status to being declared as a sick PSU, with cumulative FY2009-18 EBIT losses of 82,000 crore.

Step Forward

To prevent any further erosion of value, the Centre must do three things.

1. Divestment – First, divest all the real estate land parcels owned by the company and invest the proceeds into buying all the technology BSNL needs to be at par with private players.

2. Implement Pitroda committee’s proposal – Second, implement the proposals of the Pitroda panel, especially those related to cutting down staff costs and hiving off various businesses into different verticals.

EXAMPLE – Here, the Centre can study how British Telecom, once a struggling PSU in the UK, was turned around.

3. Autonomy – Finally, remove all political interference and appoint a strong, independent management to run the company.

Conclusion

This will not only secure the future of BSNL, but also ensure that affordable digital services reach every nook and corner of the country.

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

Mobile towers are harmless, says declassified CPCB reportPrelims Only


Note4students

Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From UPSC perspective, the following things are important:

Prelims level: ICNIRP, non-ionizing radiations

Mains level: Health issues raised by Telecom radiations


News

  • A recently-declassified study of the Central Pollution Control Board (CPCB) states that mobile towers do not have any negative effect on human health.

Details of the Report

  1. The study is one among several done in the previous decade by the CPCB, which had not been declassified since 2010.
  2. They have been published recently after the Supreme Court instructed to make public, all reports related to the impact of environmental pollution on health and the economy.
  3. The safety limits are prescribed by the International Commission on Non Ionizing Radiation Protection (ICNIRP).
  4. The report had said that there was no substantive or convincing evidence of cell phone radiation’s biological effects that could harm a person’s health.
  5. The ICNIRP standard uses the limit of 450 μW/cm2 (micro-watts per sq cm).

Effects of exposure to radiations

  1. However, the report does admit that the current exposure safety standards are purely based on the thermal effect while ignoring the non-thermal effects of radiation.
  2. In international standards, “thermal effect” of radiation refers to the heat that is generated due to absorption of microwave radiation which causes cellular and physiological changes in living beings.
  3. This effect may be responsible for genetic defects, effects on reproduction and development, central nervous system behavior and many similar serious health consequences.
  4. Non-thermal effects of radiation have been shown to be responsible for fatigue, irritability, headaches, nausea, loss of appetite, sleep disturbance, disruption and other psychological disorders, memory loss and difficulties in concentration.

New norms

  1. In 2015,the Department of Telecommunications had come up with new norms of radiation from mobile phone towers which came into force in September 2015.
  2. And the limits on power density from mobile phone towers were restricted to one-tenth of the existing limit.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Telecom tribunal scraps TRAI predatory pricing normsPriority 1


Note4students

Mains Paper 2: Indian Polity | Statutory, regulatory and various quasi-judicial bodies.

From UPSC perspective, the following things are important:

Prelims level: TDSAT, TRAI

Mains level: Regulating market players in Telecom sector and the role of TDSAT


News

Background

  1. The regulatory order had earlier given a new entrant 4G Telecom Service Providers (TSPs) the pricing flexibility till it acquired 30 per cent share of the market’s subscribers.
  2. The order has distorted the market, placing all other operators at a “serious disadvantage”.
  3. This is an unnecessary abdication of its regulatory powers by the TRAI.

Disputed order

  1. The rules provided “artificial protection” to a telecom operator which have had the “capability and intent” to destabilize the sector through predatory pricing before it attains ‘significant market power (SMP)’
  2. SMP means a service provider holding a share of at least  30% of total activity in a relevant market, according to TRAI rules.

TDSAT quashes the rule

  1. In a hard-hitting judgement, telecom tribunal Telecom Disputes Settlement and Appellate Tribunal (TDSAT) quashed TRAI rule on predatory pricing and discounted tariffs.
  2. TDSAT Bench ruled that the disputed tariff amendment order is set aside so far as it changes the concept of significant market player (SMP), non-predation and the related provisions.
  3. It had asked the TRAI to reconsider the provisions within six months.

What it means for other TSPs?

  1. The order means that other telecom operators can continue offering customized discounts to retain subscribers and therefore, need no reporting in the manner prescribed for regular tariff plans.
  2. Moreover, instead of reporting of all such discounted offers not falling within the cap of 25 tariff plans, TRAI may call for details of any segmented offer about which it may receive specific complaints.

Other suggestions

  1. TRAI has sped up process for a mobile user to port to a new telecom service provider to two days, when done within the same circle and four days when porting from one circle to another.
  2. TRAI also suggested imposing a penalty of Rs 10,000 on telecom operators every time they provide false info regarding a mobile number porting request.

Back2Basics

Telecom Disputes Settlement and Appellate Tribunal

  1. The TDSAT was established in 2000 to adjudicate disputes and dispose of appeals with a view to protect the interests of service providers and consumers of the telecom sector.
  2. The policy of liberalisation in the 1990s helped the Indian Telecom sector to grow rapidly. The entry of private and international players resulted in need of independent regulatory body.
  3. The Telecom Regulatory Authority of India Act 1997 was amended to establish TDSAT.
  4. Composition
  • The office of TDSAT is located in Delhi consisting of a chairperson and two members.
  • The qualification of the chairperson of TDSAT is that she/he has to be either the chief justice of a High Court or a judge of the Supreme Court.
  • The qualification of the other 2 members are that they must have been in the post of Secretary to the Indian government for a period of 2 years or he must have extensive knowledge in the field of telecommunication, commerce, industry, and technology.
  • The chairperson and other members of the TDSAT are liable to hold office for a term of 3 years.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[pib] India elected as a Member of the International Telecommunications Union (ITU) CouncilIOCR


Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: ITU

Mains level: Importance of ITU.


News

  • India has been elected as a Member of the International Telecommunications Union (ITU) Council for another 4-year term (2019-2022).

Other Details

  1. By securing 165 votes, India ranked third among the 13 countries elected to the Council from the Asia-Australasia region, and eighth among the 48 countries elected to the Council globally.
  2. The ITU has 193memberstates who elect representatives to the Council.

India and ITU

  1. India has been an active member of the ITU since 1869, earnestly supporting the development and propagation of telecom in the global community of nations.
  2. It has been a regular member of the ITU Council since 1952, and has played an important role in upholding principles of equality and consensus-building.
  3. India’s strong partnership with the ITU was also demonstrated in the recent ITU decision to set up the ITU South Asia Area Office and Technology Innovation Centre in New Delhi buy Jan 2019.

Back2Basics

International Telecommunication Union

  1. ITU is a United Nations specialised agency for Information and Communication Technologies, with membership of 193 countries and nearly 800 private sector entities and academic institutions.
  2. The body freezes international standards on telecom technologies that are to be used globally.
  3. ITU, based in Geneva, Switzerland, is a member of the United Nations Development Group and has 12 regional and area offices in the world.
  4. The ITU coordinates the shared global use of the radio spectrum, promotes international cooperation in assigning satellite orbits, works to improve telecommunication infrastructure in the developing world.
  5. The ITU is active in areas including broadband Internet, latest-generation wireless technologies, aeronautical and maritime navigation, radio astronomy, satellite-based meteorology, convergence in fixed-mobile phone, Internet access, data, voice, TV broadcasting, and next-generation networks.
  6. India has been member of ITU since 1869 and has also been a regular member of the ITU Council since 1952.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[pib] Cabinet approves National Digital Communications Policy-2018PIBPrelims OnlyPriority 1


Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors

From UPSC perspective, the following things are important:

Prelims level: Particulars of the Policy

Mains level: Need for application driven communication policy in India


News

Context

  1. As the present world has entered the era of modern technological advancements in the Telecom Sector such as 5G, IoT, M2M etc.
  2. A need was being felt to introduce a ‘customer focused’ and ‘application driven’ policy for the Indian Telecom Sector, which can form the main pillar of Digital India.
  3. Hence the Union Cabinet has approved the National Digital Communications Policy-2018 (NDCP-2018) and re-designation of the Telecom Commission as the “Digital Communications Commission”.

National Digital Communications Policy (NDCP) -2018 

  1. The NDCP-2018 envisions supporting India’s transition to a digitally empowered economy and society by fulfilling the ICT needs of citizens and enterprises by establishment affordable digital communications infrastructure and services.
  2. The ‘Customer focused’ and ‘application driven’ NDCP-2018 shall lead to new ideas and innovations, after the launch of advanced technology such as 5G, IOT, M2M, etc. which shall govern the telecom sector of India.
  3. The key objectives of the policy which are to be achieved by 2022 are:
  • Broadband for all;
  • Creating four million additional jobs in the Digital Communications sector;
  • Enhancing the contribution of the Digital Communications sector to 8% of India’s GDP from ~ 6% in 2017;
  • Propelling India to the Top 50 Nations in the ICT Development Index of ITU from 134 in 2017;
  • Enhancing India’s contribution to Global Value Chains; and
  • Ensuring Digital Sovereignty.

Major Features of the Policy

  1. Provide universal broadband connectivity at 50 Mbps to every citizen;
  2. Provide 1 Gbps connectivity to all Gram Panchayats by 2020 and 10 Gbps by 2022;
  3. Ensure connectivity to all uncovered areas;
  4. Attract investments of USD 100 billion in the Digital Communications Sector;
  5. Train one million manpower for building New Age Skill;
  6. Expand IoT ecosystem to 5 billion connected devices;
  7. Establish a comprehensive data protection regime for digital communications that safeguards the privacy, autonomy and choice of individuals

Strategy envisioned in the Policy

  1. Establishment of a National Digital Grid by creating a National Fibre Authority;
  2. Establishing Common Service Ducts and utility corridors in all new city and highway road projects;
  3. Creating a collaborative institutional mechanism between Centre, States and Local Bodies for Common Rights of Way, standardization of costs and timelines;
  4. Removal of barriers to approvals; and
  5. Facilitating development of Open Access Next Generation Networks.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

ITU South Asia area office and tech innovation centre to be set up in DelhiIOCRPrelims OnlyPriority 1


Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: ITU

Mains level: Importance of ITU regional centre for India.


News

  • The global telecom body International Telecommunication Union will set up its local area office for South Asia in the national capital.

Implications for India

  1. The establishment of this ITU local area office will be an important milestone for India.
  2. It signifies global recognition of the progress India has made in the field of ICT.
  3. It also places on the responsibility to work with our neighbouring countries to take the benefits of the rapid developments in this technology-driven industry to our people in the South Asia region.
  4. The ITU South Asia Office will serve nine countries – Afghanistan, Bangladesh, Bhutan, Iran, Maldives, Nepal, Pakistan, and Sri Lanka, in addition to the host country.
  5. This local area office will play a key role ITU’s development programs with focus on Least Developed Countries (LDCs), Land-Locked Developed Countries (LLDCs), Small Island Developing States (SIDS) and other similarly placed nations in the region.

Back2Basics

International Telecommunication Union

  1. ITU is a United Nations specialised agency for Information and Communication Technologies, with membership of 193 countries and nearly 800 private sector entities and academic institutions.
  2. The body freezes international standards on telecom technologies that are to be used globally.
  3. ITU, based in Geneva, Switzerland, is a member of the United Nations Development Group and has 12 regional and area offices in the world.
  4. The ITU coordinates the shared global use of the radio spectrum, promotes international cooperation in assigning satellite orbits, works to improve telecommunication infrastructure in the developing world.
  5. The ITU is active in areas including broadband Internet, latest-generation wireless technologies, aeronautical and maritime navigation, radio astronomy, satellite-based meteorology, convergence in fixed-mobile phone, Internet access, data, voice, TV broadcasting, and next-generation networks.
  6. India has been member of ITU since 1869 and has also been a regular member of the ITU Council since 1952.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Panel identifies 6,000 Mhz spectrum for 5G services


Note4students

Mains Paper 2: Science and Technology | Developments and their applications and effects in everyday life

From UPSC perspective, the following things are important:

Prelims level: Frequency Spectrum

Mains level: 5G communication in India


News

5G in India

  1. The 5G committee of the Telecom Ministry has said that about 6,000 Mhz of spectrum can be made available without delay for the next generation mobile service.
  2. The expert panel’s recommendation, if accepted, can be India’s largest-ever spectrum allocation for a service
  3. The Department of Telecom (DoT) is taking a strong initiative to make spectrum available for the new service.

Eleven bands

  1. At present, mobile phone signals in the country are transmitted in 800 Mhz to 2,600 Mhz bands.
  2. Now, the panel has spotted spectrum for 5G service across 11 bands of which four bands — premium 700 Mhz band, 3.5 gigahertz (GHz), 24 GHz and 28 GHz band — can be made immediately available for the service.
  3. The panel estimates that 5,250 megahertz of the spectrum can be made available for 5G services in higher frequency bands
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Preparing for India’s next telecom revolutionop-ed snap


Note4studentts

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Cloud computing, Big Data, AI, etc.

Mains level: The newscard comprehensively discusses some crucial issues currently present infront of the telecom sector for rolling out of the 5G mobile technology.


News

Context

  1. India has had delayed roll-outs of 3G and 4G mobile technologies in the past
  2. But the current government’s promise of Digital India requires coordinating India’s launch of 5G with its global arrival

Why is a timely roll-out of 5G needed?

  1. Future growth is going to come from applications and services based on technologies such as the Internet of Things, automation and Artificial Intelligence (AI)
  2. Telepresence and remote servicing will be a ubiquitous substitute for people taking a flight, and driverless cars may lead to a disruption in the automobile industry
  3. India wants to create 100 smart cities that will have intelligent power and urban utility systems
  4. All these applications will provide a good opportunity for the services industry as more areas demand cloud computing, Big Data, AI and machine-learning applications
  5. A timely roll-out of 5G will allow Indian entrepreneurs a chance to experiment alongside their global competitors

What is the main issue?

  1. The telecom industry’s stressed finances will create issues
  2. The arrival of Reliance Jio Infocomm has forced the widespread adoption of 4G while simultaneously stressing revenue streams
  3. Upgrading to 5G by 2020, as the government hopes, will require massive infrastructure investment

The 2017-18 Economic Survey noted

  1. “It is important to note that the telecom sector is going through a stress period with growing losses, debt pile, price war, reduced revenue and irrational spectrum costs.”

Technical requirement

  1. Since 5G works in high-frequency bands (also called millimeter waves), its range is restricted
  2. That necessitates the deployment of dense networks—i.e. more than twice the number of towers needed today
  3. Thus, the launch is likely to be spatially fragmented, avoiding areas that are uneconomical for investment
    But we should note that
  4. 5G is expected to empower remote locations by providing services such as advanced healthcare, high-quality, low-cost education, constantly modulated energy use, and the ability to work remotely
  5. It will create a new challenge

How can government help the telecom sector?

  1. Under the new National Digital Communications Policy, 2018, the government plans “optimal pricing of spectrum”, and a review of levies such as licence fees and spectrum usage charges
  2. If it follows through on these promises, it will ease the industry’s financial stress
  3. Spectrum pricing in India is among the highest in the world, and an explicit move away from revenue maximization will inspire confidence in the industry

Other important things

  1. Regulatory clarity, certainty and simplicity are musts for enabling investment
  2. Countries such as the US and China that are leading the 5G charge recognize this and are updating their regulatory regimes
  3. India must follow suit

The government should solve the issue related to the right of way (RoW) 

  1. Obtaining right of way (RoW) permission from local governments to install fibre networks has been a bottleneck that hasn’t been resolved even after the department of telecom’s RoW rules
  2. Effective implementation of the RoW policy is critical for the expansion of fiberization from the present levels of around 20% to the target of 80% necessary for a widespread roll-out of 4G, which is a prerequisite for 5G

The way forward

  1. Fast fiberization of existing infrastructure and reasonably priced spectrum will be critical to the deployment of a reliable 5G network, which could be the backbone of India’s future economic progress
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

DoT releases draft National Telecom Policy


Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation

From UPSC perspective, the following things are important:

Prelims level: Particulars of National Telecom Policy, Universal Service Obligation Fund (USOF), BharatNet
Project

Mains level: Features of National Telecom Policy, National Broadband Mission


Draft National Telecom Policy

  1. The draft of National Telecom Policy (NTP) 2018 aka National Digital Communications Policy 2018 has been
    released for public consultations by the Department of Telecom (DoT)
  2. The key strategies in the draft talks of recognizing spectrum as a key natural resource for public benefit to
    achieve India’s socio-economic goals
  3. The policy aims to accomplish some of the strategic objectives by 2022 including:
  • Provisioning of Broadband for all,
  • creating four million additional jobs in the digital communications sector,
  • enhancing the contribution of the digital communications sector to eight percent of India’s GDP from around six percent in 2017,
  • enhancing India’s contribution to global value chains
  • ensuring digital sovereignty

Features of the draft NTP, 2018

  1. There would be the optimal pricing of the spectrum to ensure sustainable and affordable access to digital
    communications
  2. Enabling light touch licensing/ de-licensing for broadband proliferation
  3. Promoting the co-use/ secondary use of spectrum
  4. Constituting a Spectrum Advisory Team (SAT) consisting of experts, industry, and academia to facilitate the
    identification of new bands, applications and efficiency measures to catalyze innovation and efficient spectrum management
  5. It proposes identifying and making available new spectrum bands for access and backhaul segments for
    timely deployment and growth of 5G networks and making available harmonized and contiguous spectrum required for deployment of next-generation access technologies

Setting up National Broadband Mission

  1. The draft talks of establishing a ‘National Broadband Mission – Rashtriya Broadband Abhiyan’ to secure
    universal broadband access for implementation of broadband initiatives, to be funded through USOF and
    PPP:
  • BharatNet for providing 1Gbps to Gram Panchayats upgradeable to 10 Gbps
  • GramNet for connecting all key rural development institutions with 10Mbps upgradeable to 100 Mbps
  • NagarNet for establishing one- million public Wi-Fi Hotspots in urban areas
  • JanWiFi for establishing two-million Wi-Fi Hotspots in rural areas
  • Implementing a ‘Fibre First Initiative’ to take Optical fiber to the home, to enterprises, and to key
    development institutions in tier I, II and III towns and to rural clusters

Setting up Telecom Ombudsman

  1. It talks about establishing effective institutional mechanisms to protect consumers’ interests including a
    Telecom Ombudsman and a centralized web-based complaint redressal system
  2. The Telecom Commission has already approved setting up of the Telecom Ombudsman and has asked TRAI
    to take care of it

Roadmap for Green Telecom in India

  1. The Policy talks of incentivizing the use of renewable energy technologies in the communications
    sector
  2. This includes utilization of small cell fuel batteries, lithium-ion batteries or other similar technologies and promoting research and development of green telecom

Back2Basics

Universal Service Obligation Fund

  1. USOF was formed by the Central Government in 1999 to help fund projects to provide widespread and non-discriminatory access to quality ICT services at affordable prices to people in rural and remote areas
  2. The money for this fund comes through a Universal Access Levy (UAL) charged from the telecom
    operators as a percentage of various licenses fees being paid by them
  3. The amount from UAL is deposited into the Consolidated Fund of India and require prior parliamentary approval to be dispatched
  4. It is headed by the USOF Administrator who reports to the Secretary, Department of Telecommunications (DoT)
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[pib] DARPAN-PLI App


Note4Students

From UPSC perspective, the following things are important:

Prelims level: DARPAN-PLI App

Mains level: Postal sector updates


News:

  • DARPAN-PLI App will help in the collection of the premium for PLI and RPLI policies at Branch Post Offices anywhere in India, with online updation of the policies.
  • With the launch of this App, indexing of maturity claims in respect of PLI and RPLI policies can be done at Branch Post Office itself, upon which the insurant will immediately be provided with the request number for further references.
  • Department of Posts has launched DIGITAL ADVANCEMENT OF RURAL POST OFFICE FOR A NEW INDIA (DARPAN) Project, which aims at connecting all 1.29 lakh Rural Branch Post Offices in the country to enable them to do online Postal and Financial Transactions.
  • The total Project cost is more than Rs.1300 crores.
  • The Hand-held devices installed under DARPAN Project will ensure improvement in the quality of Postal services being offered in remote rural areas.
  • Customers in these areas can now avail the facility of online Core Banking, booking of Registered and Speed Post articles, booking of Money Orders, deposit of Postal Life Insurance / Rural Postal Life Insurance premium and indexing of PLI / RPLI maturity claims through hand-held devices being used at branch post offices.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Trai planning a UPI-like system for public Wi-Fi hot spots


Note4students

Mains Paper 3: Science & Technology | Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology

From UPSC perspective, the following things are important:

Prelims level: TRAI, Unified Payments Interface, WANI system

Mains level: Efforts for ensuring universal internet coverage in India


Policy for public Wi-Fi hotspots

  1. The Telecom Regulatory Authority of India (TRAI) aims to develop a framework similar to the Unified Payments Interface (UPI) to aid the rollout of public Wi-Fi hotspots in the country
  2. It has been conducting pilots for Wi-Fi hotspots in Noida and Bengaluru

A target of 5 lakh hotspots

  1. Department of telecommunications (DoT) which has separately set an ambitious target of deploying 500,000 Wi-Fi hotspots by December across the country from the current 38,000

How will the system work?

  1. TRAI is working on a framework which will ensure that the Wi-Fi hotspots can be provided in a seamless manner, in a grid situation
  2. It will be prescribing interoperable standards to authenticate the user, payment mechanism, and unbundling (operations)
  3. What UPI is for the payment ecosystem, this framework will be for the Wi-Fi hotspot ecosystem
  4. Launched in 2016, UPI is a system that powers multiple bank accounts into a single mobile app (of any participating bank), merging several banking features, seamless fund routing and merchant payments under one hood

Draft design of public Wi-Fi network project

  1. In July last year, Trai issued a draft design of public Wi-Fi network project under which any entity with a valid permanent account number (PAN) would be allowed to set up public data offices (PDOs)
  2. The draft design also provided detailed technical specifications for compliance by various providers to ensure full Wi-Fi access network interface (WANI) system interoperability
  3. Trai had also recommended a central registry managed by either itself or DoT or an entity approved by either of them containing information about the PDOs
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Cabinet approves easing spectrum cap


Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Cabinet decision and its possible benefits for the telecom sector.


News

Cabinet decision on spectrum

  1. The Union Cabinet has approved relaxing the cap on spectrum holding by telcos
  2. This approval is expected to aid mergers and acquisitions in the sector
  3. The Cabinet has also given telcos the option to extend the time period for payment of spectrum bought in auction to 16 years from the present 10 years
  4. This is likely to help with the cash flow in the short to medium term, while adding Rs. 74,446 crore till 2034-35 to the government’s kitty due to no reduction in interest rates
  5. The government is hopeful that this move would encourage participation in future spectrum auctions

Possible benefits of this decision

  1. The decision based on the recommendations by the Inter Ministerial Group on stressed assets in the telecom sector
  2. It will facilitate investments, consolidation and enhance ease of doing business, said an official release
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI wants Jio rivals to pay Rs. 3,050 crore fine


  1. The Telecom Regulatory Authority of India recommended a hefty penalty of Rs. 3,050 crore on top three telcos – Airtel, Vodafone and Idea
  2. The fine is for violating their license agreement and denial of interconnection to new player Reliance Jio
  3. TRAI stated that these violations are against public interest
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

[op-ed snap] Bandwidth for growthop-ed snap


  1. Theme: Disappointing response to the recent auction of 2350 megahertz of telecom spectrum.
  2. Reasons: The high indebtedness of India’s telcos and the high base price set by the government.
  3. The positives of Indian telecom sector: A billion consumers, endless minutes of talk-time a day and low tariffs.
  4. Concerns: The quality of service on offer is deteriorating, both in data and voice.
  5. In many areas, networks that should operate at 65 per cent capacity are working at 95 per cent due to high congestion, leading to poor voice services.
  6. Despite the new spectrum with telcos, the sheer volume of voice traffic means that improvements in quality may be marginal. Similar issues plague data traffic.
  7. This could have a bearing on the quality of connectivity and the reach of several of the government’s ambitious programmes, from Digital India to direct benefit transfer.
  8. The way ahead: The government needs to learn from this episode and free the bureaucracy from the fear of the auditor and the investigator soon, for better outcomes in all its plans.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Ministry unveils portal to check call drops


  1. Made by: The Telecom Regulator Authority of India
  2. Functions: Will allow mobile phone users to check the call drop rate, network coverage and call quality on their operators’ network
  3. Transparency portal: Bring in transparency about the network performance as consumers will be able to see if the call drop situation has changed
  4. Further plan: TRAI is likely to come out with a consultation paper on net neutrality and their final view on the issue of free data by the end of this month
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI seeks views on use of public Wi-Fi networks


  1. News: The Telecom Regulatory Authority of India (TRAI) issued a consultation paper, seeking views on the use of public Wi-Fi networks for expansion of broadband in the country
  2. Aim: Likely to result in faster Internet speeds, while reducing data costs by up to 90% for consumers
  3. TRAI pointed out that the state of Wi-Fi hotspots was not encouraging in India, significantly lower compared to countries like France, US, and UK
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drop test in Sikkim, Darjeeling


  1. News: All telecom operators failed in the Telecom Regulatory Authority of India’s (TRAI) call drop test in Sikkim and Darjeeling
  2. Exposing poor state of mobile services, TRAI said that most of the calls could not be connected on their networks
  3. Penalty: TRAI has fixed a penalty of up to Rs 2 lakh for poor mobile services, including call drops
  4. This penalty kicks in for more than 2% call drops in a quarter in 1 telecom circle
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI dedicated to quality service delivery


  1. TRAI is looking at various options to ensure that telecom operators work to improve service quality, including reviewing call drop parameter which is set at 2%
  2. It rolled out a dedicated website for publishing result of test drive that it conducts
  3. To make it easier for consumers to file a compliant against telemarketers, TRAI also unveiled ‘DND Services’ mobile application
  4. TRAI has developed a mobile App for easy registration of Unsolicited Commercial Complaints (UCC) to the service providers
  5. Currently, consumers can log complain about messages and calls from telemarketers through toll free number 1909
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI seeks more powerSC Judgements


  1. The Telecom Regulatory Authority of India (TRAI) has approached the government seeking powers to impose penalty in order to ensure quality of service from telecom operators
  2. Background: This follows the Supreme Court quashing the TRAI’s regulation to impose penalty on operators for call drops, calling it ‘arbitrary’
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

SC quashes TRAI’s call drop rules


  1. Context: SC has given order to remove TRAI’s call drop regulation
  2. SC: Regulation is arbitrary, intention is to penalize service provider rather than ensure quality service
  3. Assumption apparent in Telecom Consumers Protection (Ninth Amendment) Regulations, 2015 is incorrect
  4. Assumption: Every call drop is deficiency of service provided by service provider
  5. SC asked parliament to frame law on the lines of U.S. Administrative Procedure Act
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Cabinet nod for liberalisation of spectrum at TRAI prices


  1. What: TRAI recoomended prices will be taken as provisional prices wherever administratively (not auctioned) allocated spectrum is available
  2. Balance: after actual auction, the balance will be taken
  3. Why: because market determined price is not available at that moment
  4. Benefits: it would yield the exchequer Rs.1,300 crore and would also lead to better utilisation of spectrum
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Centre may propose solution in call drops stand-off


  1. Context: TRAI regulation made the service provider liable to compensate consumers for call drops
  2. News: The govt may propose a solution in the SC to end the impasse between the TRAI and major telecos over the new regulations
  3. The telecom operators argued that 2015 regulations would affect the orderly growth of the sector and make it impossible for them to plan their businesses
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Delhi HC upholds TRAI order to compensate users for call drops


  1. Background: Earlier, TRAI had ordered that every originating telecom service provider is made liable to credit the calling consumer by 1 rupee for each call drop within its network for a maximum of 3 call drops/day
  2. Later, the telecom operators had challenged the the order
  3. News: The Delhi HC decision makes it mandatory for cellular operators to compensate subscribers for call drops
  4. Impact: Telecom operators may end up paying around 1,000-1,500 crore in a year, if networks are not improved
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Adopt open source for connectivity: TRAI


Any technology that is deployed for connectivity must be interoperable, says TRAI chief

  1. The telecom regulator hinted that technology-driven connectivity ventures such as Google and Facebook would be acceptable, only if they followed an open source framework
  2. Facebook is working on a venture that deploys drones in remote and rural areas to provide Internet connectivity
  3. Google’s Project Loon envisages the use of helium-filled balloons to provide data connectivity in remote regions
  4. Each balloon can provide connectivity to a ground area about 40 km in diameter using a wireless communications technology called 4G
  5. The two are trying these approaches as alternative models to reach data connectivity aerially to users
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI rules in favour of Net neutrality


TRAI may review these regulations after a period of 2 years.

  1. No service provider can offer or charge discriminatory tariffs for data services on the basis of content
  2. This effectively prohibiting Facebook’s Free Basics and Airtel Zero platform by Airtel in their current form
  3. Reduced tariff for accessing or providing emergency services, or at times of public emergency has been permitted
  4. Financial disincentives for contravention of the regulation have also been specified
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drops persist, finds TRAI audit


  1. TRAI has revealed that there has been virtually no decrease in call drops and improvement in the quality of mobile network coverage in recent months
  2. This is despite the govt’s tough posture on the issue
  3. The telecom regulator has been auditing and assessing their Quality of Service through independent agencies
  4. Network coverage improved a bit in New Delhi and Mumbai, but saw no improvements in Kolkata and other cities
  5. The audit agencies conduct sample drive tests across various cities in the country to assess coverage quality
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

TRAI for PPP model for Bharat Net Project


The regulator says Central and State govts. can be anchor clients of the project.

  1. Bharat Net seeks to connect all of India’s households, particularly in rural areas, through broadband by 2017, forming the backbone of the government’s ambitious Digital India programme.
  2. At present, a special purpose vehicle, Bharat Broadband Network Ltd (BBNL), under the telecom ministry is handling the roll out of optical fibre network.
  3. A PPP model that aligns private incentives with long-term service delivery in the vein of the Build-Own-Operate Transfer/Build-Operate-Transfer models of implementation.
  4. The regulator has also suggested that contract period should be of 25 years, which can be further extended.
  5. The funding should be done to bridge the loss incurred due to higher operational expenses and lower commercial accruals.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

The trouble with spectrum pricingop-ed snap


The regulator’s recommendation holds risks for an industry that serves a crucial socio-economic objective.

  1. TRAI recommended very high reserve price for auction of spectrum in 700 MHZ band.
  2. This band has high performance efficiency and utility in improving and expanding high-speed wireless broadband services across rural areas.
  3. But high pricing of a public asset may end up having the exact opposite effect:.
  4. It could make a scarce resource so expensive that its meaningful utilisation is compromised, thus unable to serve the larger public good.
  5. Very high per unit price realisation, while possibly helping meet immediate fiscal needs, would only bleed the industry of resources.
  6. High price of spectrum would also affect private investment in network expansion and infrastructure.
  7. The financial viability of the industry is crucial both for private investment and for the government to earn recurring revenues.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Trai wants auction of all available spectrum


The move is likely to put additional burden on telecom firms already stretched after spending on 4G and the 2015 spectrum auction.

  1. India’s telecom regulator has suggested the government auction Rs.6 trillion worth of airwaves, more than five times the value of spectrum sold in the previous auction.
  2. A move that may, if accepted, increase the burden on the already overstretched finances of the telecom operators.
  3. The Trai has recommended auctioning of all the available spectrum, including airwaves in the 700-megahertz (MHz) band.
  4. The Trai recommendations are part of a pricing exercise that the regulator conducts prior to every auction.
  5. To determine the minimum price at which the airwaves should be sold.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

DoT to seek regulator’s views on spectrum reforms


  1. The Department of Telecom will seek TRAI’s views on the liberalisation of 800 MHz spectrum in circles where a market determined price is not available.
  2. The govt. has already issued guidelines to liberalise the administratively allotted 2G spectrum.
  3. This allowed operators to offer latest mobile services, including 4G, using the same radio waves.
  4. The govt. will levy latest auction determined price on the spectrum to be liberalised.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drops decline after Govt. steps in, says Prasad


  1. The govt’s intervention has led to a decline in frequent call drops faced by mobile phone users.
  2. The private operators have installed over 22,000 new cell sites between July and October.
  3. The problem of call drops have improved in New Delhi but operators still didn’t meet the quality parameters of less that 2%.
  4. A total of 18.33 lakh mobile sites are being operated by telecom service providers across the country.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drop penalty to stay for now, says TRAI Chief


  1. TRAI said, regulations are valid as of now and operators should ready their systems to comply with them from January 1.
  2. The regulator will examine the issue raised by the industry, post which a final decision will be taken.
  3. An impression is being created that the authority has imposed this regulation without considering the technical feasibility of its operation.
  4. Authority will examine legally if it can review the decision or not and then decide the course of action.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Soon you will get Re. 1 for call drops


  1. Call drop occurs after voice call is interrupted or disconnected before it is completed after being successfully established.
  2. Thus, it can be said that it represents telecom operator’s inability to maintain a successfully established call prior to their normal completion.
  3. Call drop may occur if signal strength of mobile tower of telecom operator goes below the minimum acceptable single to make a call.
  4. TRAI has made it mandatory for telecom operators to compensate consumers by Rs.1 for call drops with effect from 1 January 2016.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drops: TRAI plans to impose fines


TRAI’s service quality parameters includes call drop, availability of mobile towers, time taken for a call to connect, network congestion, voice quality and network related issues.

  1. TRAI raised the penalty on telecom operators to up to Rs. 2 lakh for poor mobile service quality.
  2. The penalty would apply if the operators are unable to meet the benchmark set for the quality of service in 2 or more subsequent quarters.
  3. The penalty will kick-in if call drops in a quarter average more than 2% of the total traffic in a telecom circle.
  4. Consumer-related issues include complaint redressal, refund of wrongly charged money, access to call centre. etc.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

DoT issues guidelines: Telcos can now start spectrum trading


The spectrum trading notification said that all access spectrum bands earmarked for access services by the licensor (DoT) will be treated as tradable spectrum bands

  1. The department of telecommunications (DoT) notified guidelines relating to spectrum trading, which will help mobile operators buy and sell spectrum from one another.
  2. It enables some weaker operators to smoothly exit business or reorganise their entire business model,
  3. The stronger ones can increase their spectrum bank which will help them provide better services.
  4. Now, spectrum can be traded between two telecom companies with only outright transfer of right to use it from the seller to the buyer.
  5. Trading will be permitted only on a pan-LSA (licensed service area) basis.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drops raise questions about digital india


Let’s analyse the fact about the telecom infrastructure of telcos.

# Present capacity – 5,50,000 towers
# Current requirement – 1,00,000 towers

What are the other challenges ?

  1. The major problem is that there is no uniform national policy on the setting up of these towers.
  2. International comparison suggest that though big metro’s have 2.2 towers/square-km, but Delhi/Mumbai faces a heavy load, as compared to other international counterparts.
  3. Though cell phone towers acts as boosters & help radio waves travel further, but they can interface if so many towers are established.
  4. Shortage of spectrum – International comparison
    • A telecom company in India have only 12 MHz of spectrum, while the global average is 40 MHz.
    • This means Indian telecom companies have less spectral efficiency & need more towers.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Call drop menace to end in a month’s time


  1. The minister has advised the operators not to do anything to meet the growing demand for data services at the cost of voice.
  2. The telecom companies have started optimising their networks.
  3. TRAI has already initiated a consultative process to ascertain whether the operators need to monetarily compensate the consumers for system-generated call drops.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Telcos to blame for call drops: TRAI chief


  1. According to TRAI chairman, the remedy for the problem lies solely with the service providers.
  2. If service providers have more customers than they can satisfy, either they should put more infrastructure or not have the customers.
  3. He stressed that the regulator will not remain a silent spectator and will take proactive steps if the situation does not improve.
  4. As there is opposition from operators to make their operational capacity public, he said, it is an issue of transparency.
  5. TRAI is committed to consumer protection because they are weakest in terms of articulating their problems and grievances.
Telecom and Postal Sector – Spectrum Allocation, Call Drops, Predatory Pricing, etc

Cabinet nods for spectrum trading guidelines


  1. It will allow telecom companies to buy and sell spectrum.
  2. This is expected to help address the problem of shortage of spectrum, leading to better quality of services for mobile phone users.
  3. Government allowing companies to share airwaves in the same band so as to reduce call drops.
  4. Presently, spectrum can be acquired by companies only through government auctions.
  5. It gives ‘right of use’ to operators through auction. That right of use can be traded between two service providers.

 

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

Call drop: panel to submit report before Winter Session


  1. The issue of call drop will be taken up by the standing committee on information technology and telecom.
  2. Telecom companies are finding it difficult to install towers because of resistance from local people due to health fears related to tower radiation.
  3. The Department of Telecommunications should lay down certain guidelines on the number of telecom towers vis-a-vis subscriber base.
  4. Private operators will explain their challenges to the parliamentary committee.
  5. Telecom operators should ensure that they have infrastructure to serve customers better.

6
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