Rural Connectivity & Mobile Broadband Penetration

BANGALORE, INDIA:

I have been associated with the Indian Mobile Industry since its inception in 1995, we had just started commercial services in metro circles and was busy rolling out in circles. It was a particularly challenging time when TRAI had just started up and DoT was the policy maker, operator and regulator all rolled into one and the process of getting clearance for cell sites could take up to an year.

It gives me great pleasure to see that a struggling industry then has now transformed into the 2nd largest wireless network and has made an indelible mark in the global arena.  While, the scenario has drastically changed, however the challenges still remain albeit the face and size of the issues and challenges the face has altered.

 Q) What is the present focus for COAI when it comes to pushing industry issues and initiatives in India?

My immediate focus areas for the coming year are:

Rural Connectivity: It is expected that the next phase of growth will come from the rural India. There is a lot of potential in rural areas, which the operators are already exploiting. However, the aim should be to bring the tele-density level of rural areas at par with the urban areas. Only when mobile connectivity reaches the unconnected, will its benefits start to flow for them.

Mobile Broadband Penetration: The 3G and BWA auctions have been concluded rolling out is happening and operators have started launching 3G services. Operators have paid exorbitant amounts to gain the spectrum for 3G and BWA and now utilizing this spectrum to spread additional services to the masses at equally affordable prices as mobile telephony, will be a challenge for them.

However, to make India an information society, all of us will have to work towards providing such services as e-governance, e-education, e-health, mobile banking, etc. to the relevant sections of the society.

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Lowering of Levies and Duties: It is sad to see that the industry which is contributing so much towards the socio economic development of the country is burdened with such high levies and duties. It is very important that telecom is seen as an essential service and the levels of levies and duties on the industry are significantly brought down.

No longer should the mobile industry be viewed as an endless source of revenue to fix Government budget deficits but an essential national service that is to be nurtured so it can continue to contribute to economic development.

Enhanced Industry Profitability: The recent price wars in the voice segment of our business, the commoditization of voice services, increasing levies and taxes, mindless competition, some uneven regulatory policies have all contributed to the deteriorating profitability of our industry.

A “sick industry”, wasted of its financial health, cannot be an engine for national development! I hope we can move towards a competitive environment which caters to the needs of our customers, contributes to national development and provides a fair return on investments. I trust we have the talent and resources to ensure these are not mutually exclusive goals.

Development of an Enlightened regulatory Environment:  much of “Convergence”. This has led to an increasing need for multiple branches of Government to converge in developing regulatory policy — e.g., we have seen the IT, Broadcasting, telecommunications, Finance and Home ministries involved at some time, either individually or together, in mobility issues.

This clearly calls for a new paradigm for Regulation. No longer is it appropriate to have piece meal regulatory policy but a comprehensive regulatory structure that allows and fosters the dynamic forces of technology and the market place to drive innovation, value customer choice, economic development, investor confidence and national priorities.

{#PageBreak#}Q) What are some of the biggest challenges that a body like COAI is facing in India?

Biggest challenge for COAI as mentioned above is to retain profitability and sustainability of this important sector that too parallel to its growth both in terms of technology enhancement as well reach in the farthest and remotest area of the country. 

Q)Please share with us some of your recent milestones?

One of the most significant achievements has been successful implementation of Mobile Number Portability on a national level. COAI was requested to take the lead in coordinating the implementation and commercial roll out of nationwide MNP in June, 2010. COAI completed the project in a record time of 6 months.

COAI is working closely and progressively with DoT and government on issues related to subscriber verification and security requirements for over all network equipment and elements and the Industry is hopeful of positive conclusion.

COAI made several presentations to key MoF members, Member Finance-DoT and on industry position on Goods and Service Tax (GST), the recommendations are being actively considered in proposed version of GST act.  Similarly we are also working closely with the Finance Minister of Jammu & Kashmir and his Advisors on a proposed settlement on the vexed issue of Sales Tax on mobile services and entry tax. The ministry is actively considering recommended course of action and is working on putting together a working group between state and industry representatives to resolve the matter.

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COAI is also working with DoT and TRAI on the National Numbering plan to be able to cater to a larger audience and to avoid re-allocation of present subscribers to a 11 digit numbering scheme.

COAI is actively representing the Industry for formulation of proposed Broadband and NTP 2011.  We have recently submitted detailed study on response to TRAI 2G Spectrum Pricing Recommendation. The other significant achievements this year have been favourable judgment from Delhi High Court on “High fees”, imposed on the towers of member companies by the NDMC in the Delhi area, favorable ruling from the TDSAT on Interconnect Charges whereby TRAI was instructed to consider all relevant costs, including Capital costs, in the formulation of Interconnect termination charges.

TDSAT setting aside claims of the DoT for increased Microwave charges and  “Non-Telecom related revenue” as part of AGR. This provided significant savings to member operators.

Q)  While pushing for different technologies and standards, how do you make sure that COAI is making sure that the interest of the industry is taken care of?

COAI has always advocated for technologies which have open standards, are harmonized globally and have a clear roadmap for future augmentation.   The interest of our members and health of this sector is of a prime concern to us.  COAI works in tandem with its members and strategic partners, especially on issues concerning technology and standards. 

We also work closely with International bodies i.e. GSMA and ITU, 3GPP, UMTS to ensure that the growing needs of the Indian telecom market and the dynamic technologies and solutions required are voiced at these global forums.

{#PageBreak#}Q) What more needs to be done in the Mobility arena in India, in order to realise its full potential?

To realize the full potential of dynamic sector such as Indian Mobile Industry it is vital that, strategic policies should be adopted which are in sync with the ever changing scenario of the Indian telecom sector.  These policies and plans should be able to envisage the future national policy blue print, taking into account current conditions in the sector and changes and developments that have taken place in the last decade and the expected future scenario.

a.First and foremost mandate of the policy should be to clearly state that the telecom sector is to be recognized and treated as a vital infrastructure with the attendant benefits and responsibilities of this category.

b.These objectives need to go beyond simple tele-density but look at the telecommunications networks India requires to compete in the global economy in the next decade.

c.Uniform policies should be defined by the Central Ministry for the optimal growth

d.Micro-regulation should give way to a market based approach.

e.Renewal of existing telecom licenses in a transparent and rational basis.

f.Immediate measures should be adopted to unburden the sector or the high cost structure and multiple duties and levies both at the central as well as the state level. This will encourage further investment, tele-density and services in the sector.

g.A simplified taxation and levy structure that avoids double-taxation and meets the appropriate objectives of raising revenue for government, the health of the industry and equity in the tax burden.

h.A policy that incorporates the notion that the Telecommunications Industry is not a cash cow to be milked to raise revenues and close the government budget gap, but an industry that needs to be nurtured to ensure National Development goals are met through dynamic market forces unleashed by the industry.

i.Initiatives that promote Indian Inputs and inclusion into international standards and standard setting.

j.Policies that protect and promote private property rights (real & intellectual), reward investments, prudent risk taking (R&D) and encourage economic development and growth.

Communications Minister Mr. KapilSibal,has also promised a level playing field for all telecom operators, saying he wanted sustained growth in the sector and not politics.

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"We will ensure a level playing field for all telecom operators".  COAI and its members are committed to work with the Minister and DoT to implement the goals articulated by the Minister, to ensure that the benefits of mobile/ broadband are able to percolate down to all segments of the society including the rural masses and that these services are used by them not only to increase their income and productivity, but also in fact, enhance their quality of life.

 Q) What kind of trends do you see in the market in terms of converged devices and next generation access technologies being deployed enterprise as well as operators in India?

Going forward we envisage  enhanced demand for high speed broadband and data and data services both from enterprise as well as consumers.  As per a recent survey conducted by CyberMediaReserch, the mobile handset market, both feature packed phones and smart phones, will account for Rs.128,129crore in 2014 , up from Rs.64077 crores in 2011.

Smart phones , tablet PC’s priced below 10,000/- will be game changers in the converged devices environment.   The increased market competition, indigenous manufacturing and  advent of new applications and services will only expand the market for the better.