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BW Businessworld

‘There Is Need For Affordable Spectrum Pricing’: DG, COAI

Most countries that have adopted auction as a mechanism to allocate spectrum, do not have any revenue share such as Spectrum Usage Charges in India. It is important for the Cabinet to relook at the high base price, Lt. Gen. (Retd.) SP Kochhar, Director General (DG), Cellular Operators Association of India (COAI) says. Lower reserve price will enable TSPs to work and focus towards fulfilling the objectives of ‘Digital India’, tells DG, COAI to Ashish Sinha of BW Businessworld.

Photo Credit :

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Excerpts: 

Why has the COAI been asking for imposition of floor Tariffs?
Telecommunication services are essential in nature. The telecom industry is an ‘enabler’ for catalyzing growth in other industries. Especially with 5G about to revolutionize the current digital ecosystem, the industry would need to make significant investments towards infrastructure and network rollout to relish the benefits of the technology. 

However, the financial health of the telecom industry is under stress. Over the years, the industry incurred financial losses because of the downward pricing trend of data tariffs. Therefore, it becomes important to sustain the financial viability of the industry for the growth of the Indian economy. 

Revenue generation is important for the telecom service providers to continue making significant investments to provide seamless network connectivity across India. In this regard, floor pricing becomes critical for the smooth recovery of the sector from the immense cost burden. Hence, COAI has been making regular pleas to set the floor price. TRAI had also done a consultation with COAI over the issue. 

Your comment on the Base Price for 5G Spectrum - What are the industry expectations on price? To ensure the implementation of 5G services in India, the pricing of the spectrum should be kept moderate. There is a need to strike a balance between Government’s expectation to generate revenue from the auction and growth of the sector and the overarching impact of 5G across the sectors. 

With emerging technologies like 5G, which would serve diverse applications, new spectrum requirements would emerge. Therefore, a policy on spectrum needs to address issues such as having a long-term roadmap for spectrum assignment and ensure availability of spectrum to the TSPs at affordable prices

Looking forward into future spectrum auctions, it will be good to keep in mind that spectrum price will define the success or failure of the auction. In a price-sensitive market like India, the high reserve price has often been a factor for spectrum remaining unsold, thereby making for unviable and unsustainable business cases

What kind of Investments would 5G Roll out entail - for infrastructure, for auctions, any other related requirements? How does that compare to countries where 5G services have been rolled out? Which are the best examples that India should look to adopt/get inspired on handling 5G?
With its massive network capacity, 5G will bring an immense increase in speed and bandwidth. This would need to be backed up by robust and reliable infrastructure which invites significant investments in optical fiber cables, cellular towers, antenna, repeaters etc. Being a capital-intensive sector, the telecom sector also needs to make huge investments for spectrum acquisition, network rollout, establishing reliable security architecture etc.

Most countries that have adopted auction as a mechanism to allocate spectrum, do not have any revenue share such as Spectrum Usage Charges in India.In countries like United States of America and Australia, the annual spectrum fee is kept at a marginal level. This is because it is meant to cover the cost of management and regulation of the spectrum. Even Asian countries like China have a much lower annual spectrum charge. However, in India, the SUC charge continues in the range of 3% to 6% of the revenue (AGR).

How will 5G technology change the telecom ecosystem? When are 5G auctions likely to start?
5G technology is an Avant-Garde technology that will not only revolutionise the telecom ecosystem but will also transform the way we live and work. By offering immersive experiences, boosted connectivity, higher bandwidth, and advanced communication that is not only restricted to human to human, or human to machine communication but also extends to machine-to-machine communication, 5G will revolutionise our lifestyle completely.

5G will bring unparalleled efficiency to telecom networks. It will bring us closer to realize the dream of Digital India. It will catalyse exponential economic growth and trigger Industry 4.0 by paving the way for the rise of disruptive technologies like IoT, AR, VR, AI etc and facilitate smart agriculture, smart healthcare, smart manufacturing, smart cities etc.

DoT has allowed for trials to be conducted in rural, suburban, and urban areas. DoT has allowed 6 months’ time for trials within which 2 months are for procurement and setting up of the equipment. After trials, we can expect the auction to begin next, and soon we may soon see 5G technology available for all.

What are the key challenges facing the industry in the implementation of 5G technology? How is COAI addressing them?
While there has been overall progress, there are some roadblocks on the way facing the industry. It is common knowledge that the telecom industry is facing financial troubles. The benefits of 5G can only be relished if adequate spectrum is made available to the industry. In this regard, Government’s decision to allow 5G trials in low band (700 MHz), mid band (3.2 GHz to 3.67 GHz), and high band (24.25 GHz to 28.5 GHz) is a silver lining. However, for the auction, there is a need for affordable spectrum pricing for the effective utilization of spectrum waves.

The issue of reduction in spectrum prices sought by telcos is not new.India is a price-sensitive market. High reserve price makes the business case unviable and results in some spectrum remaining unsold. It is important for the Cabinet to relook at the high base price. Lower reserve price will enable TSPs to work and focus towards fulfilling the objectives of ‘Digital India’, and allow them to make significant investments for expansion of 5G services.

Fiberaization is the next key foundation for 5G readiness. Government support for uniform implementation of Row rules in all the states and boost for fiberization is also something that the TSPs are looking forward to. 

It would also be a big boost to Indian operators if the the government were to accept telecom as a key infrastructure for growth followed by the relaxation of taxes and levies on telecom infrastructure. Currently, TSPs in India pay one of the highest levies in terms of License Fee, Spectrum Usage Charges, GST etc. compared to other countries. 

All these will help the TSPs in strategizing their commercial launches for making 5G affordable for Indian consumers.

In line with building the necessary infrastructure for digital advancements, what is industry planning for the recurring challenge of illegal mobile boosters?
Department of Telecom's wireless monitoring organization has conducted various raids in the past to bring down the number of illegal network boosters being installed. Mobile signal boosters installed illegally interfere with mobile services resulting in call drops and other quality issues. As an association, we have also written a formal letter to e-commerce websites to pull down listings of these illegal boosters. 

The Department of Telecommunications (DoT) has taken note of the illegal online sale of network repeaters and mobile signal boosters and has written to all major e-commerce platforms to enhance measures to prevent such sale

The association is also working closely to ensure a ban on the import of such equipment entering the Indian market and educate consumers about the penalties and law against the installation of these boosters.

How does it impact the existing network?
Illegal signal boosters and repeaters are said to cause interference with signals from towers impacting the overall cellular network quality as they are wideband boosters. They distort mobile signals for other customers in the vicinity of the booster. These devices are the main reasons for network issues like call drops and low data speeds. Make mobile handsets transmit higher power, to manage connectivity with the site leading to even higher battery consumption and poor network. When these boosters are installed by the TSPs themselves, such aspects are being taken care of to tune with the networks. 

Is India ready to embrace 5G technology? Do you think we have the adequate infrastructure to relish the benefits of the technology?
5G technology that is going to revolutionise the lifestyle by transforming industries, enhancing experiences, and advancing societies. It will benefit our economy by bringing multi-dimensional growth across different economic verticals. 5G trials have already been piloted in India and it means India is gearing up to embrace the revolutionary technology. It will overhaul the benefits of 4G and provide greater speed, immersive experiences, advanced communication extended to machines, boosted connectivity, and much higher bandwidth.The current cellular infrastructure will have to be advanced by a huge investment in network densification. To accommodate the 5G technology, there is a need for the deployment of 5G enabling infrastructure like optical fiber cable (OFC) network. OFC cables, run underground connecting different mobile towers. They carry huge amounts of data at a very high speed. Presently, only 33% of our mobile towers are connected with fiber. The situation demands desperate improvement if we wish to derive the benefits that 5G promises to offer. To embrace the 5G technology, the industry will have to make more extensive investments to expand network capacity, establish more telecom towers, fiberize the existing and new towers, dispel myths around EMF radiations, upgrade existing security infrastructure etc.


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Lt. Gen. (Retd.) SP Kochhar coai digital india