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Telecom 2016: The Year That Was - Digital India 2.0

For an industry which is as significant, all pervasive and as large as telecom, it is not an easy task to sum up the entire year in binaries, there were many shades that the industry experienced in a year which was also a year of turbulence & flux for the industry

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The telecom sector in 2016 touched lives, connected people, informed, educated, spread awareness, created jobs, saved lives, built relationships, nurtured bonds, became a tool for knowledge, made significant investments, contributed to the exchequer and the economy and above all bridged the digital divide and amplified financial inclusion. For an industry which is as significant, all pervasive and as large as telecom, it is not an easy task to sum up the entire year in binaries, there were many shades that the industry experienced in a year which was also a year of turbulence & flux for the industry. We feel a sense of collective pride and great joy while sharing the key highlights with the entire community.

As another year draws to a close we feel very proud to have deepened democracy, given voice to the margins and underrepresented communities and stakeholder groups, articulated dissent, spoken truth to power, advocated for a better policy and regulatory environment and worked shoulder to shoulder with the government through its most ambitious programs of digital capacity building, removing corruption, moving India towards a cashless economy. Our networks and service providers were resilient and innovative, responsive and creative in problem solving and tireless in their pursuit for excellence and an enhanced consumer experience. For a sector reeling under severe debt the industry through our members at COAI the industry contributed to grow and make substantial investments in spectrum acquisition, towers, infrastructure, human resource, research and development.

We are also very fortunate to have a forward looking Prime Minister Narendra Modi, who has such a clear vision and appreciation for the immense power and potential of the telecom sector. It is his vision of Digital India, that COAI and all its members wish to translate into reality. We're equally delighted to have Shri Manoj Sinha as our minister who has been most sensitive and responsive to our concerns and who brings with him immense experience of having run the Railways so successfully in India. On all occasions he has been extremely nuanced and supportive of the Industry and appreciative of the work we have done over the course of the last year.

We also want to take this opportunity to thank Shri JS Deepak, Secretary DoT, who not only has the distinction of being one of the hardest working secretary we have had the good fortune of engaging with, but also the most erudite, well-travelled, articulate, patient and persevering. He has been most generous with this time, has relentlessly run awareness campaigns to dispel myths and around mobile towers and has been articulating a strong and purposeful vision for broadband connectivity in India. The industry is truly delighted with the collaboration that we have been able to forge with the government for India and its consumers. To deliver high quality voice and data services at the most affordable prices and to connect every Indian is truly our mission, expanding our reach consistently across the length and breadth of this vast nation.

It was a fruitful year and both COAI and the telecom industry stood true to its promise. 2016 witnessed a higher level of synergy between the telecom industry and the government and a lot of issues were tackled jointly and in cooperation with each other. The year started with the issue of call drops vexing both customers and operators. The TRAI order was successfully challenged by operators in the Hon. Supreme Court where the Hon. Court finally and decisively put the matter to rest, allowing the operators to focus on the root causes. Our member operators implemented an aggressive 100-day program submitted to the MoS and DoT and overachieved the 100 day targets. The industry tackled the concern over call drops and network quality with alacrity, taking the 100-day plan forward in agreement with the government and over achieving all its targets on investments as well as the number is 60,000 of BTSs (base transceiver stations).

The government also provided the much needed support by clearing several long pending issues like uniform Right of Way (RoW), spectrum sharing and trading guidelines, spectrum harmonisation etc.

The successful auction of spectrum, helped the government garner Rs 65,789 crore. This is a major step for future advancement in mobility and will help us move closer to our tele-density target. Taking forward the industry's commitment of providing the best services, the operators further rolled out 4G LTE networks. The government was able to harmonise spectrum as per global standards. This was indeed commendable.

COAI and the industry also welcomed our valuable member Rjio's launch into the sector and congratulated Mukesh Ambani on adding another feather in his cap. RJIL, finally commenced commercial service introducing an innovative package of services including free voice for life. The entry of RJIL led to major confrontation with other operators over POIs which finally got addressed by TRAI. Recommendations of TRAI are being reviewed by DoT.

Free voice service from RJIL lead to competitors adjusting their tariffs to stay competitive.

Below are some important developments which took place in the telecom industry in 2016:

From Industries Point of View:

Call Drops:

  • About Rs 9,27,000 crores have been invested so far by TSPs in building world class Telecom Infrastructure which is second largest private sector investment in infrastructure among all the sectors in the country. To support the orderly growth of the Telecom Sector, TSPs have invested around Rs 3,27,000 crores in Spectrum Auctions alone since 2010.
  • To address the problem of call drops, there is an addition of about 3.51 lakh BTSs in last 12 months.
  • The RoW guidelines were cleared by the government, which will fast-forward India into the digital world by ensuring rollout of optical fibre cables and over-ground telecom infrastructure, ensuring success of Digital India Mission.
  • The industry has made consistent and significant efforts to optimize networks and which have largely been completed, with more than 2 Lakh sites being installed in last 15 months for 2G and 3G services across the country since Jan 1, 2015. COAI believes that these efforts will AUGMENT FURTHER conformity with TRAI and QoS requirements.
  • The industry is also extremely thankful to the Union Telecommunications Minister and the Government of India for their unstinted support to help enhance network and infrastructure installation processes and will work with the Government to take forward the Digital India vision
Spectrum Auction:
  • The Spectrum auction took place successfully in the month of (700 MHz spectrum remained unsold due to an unrealistic reserve price) The industry has asked that the prices be aligned with market forces and the spectrum be put up for auction again in two years' time.
  • 6.26% telephone subscriber's year-on-year. Total no of active wireless subscribers is 930.57 million as on 31st August 2016.
  • The industry is now looking forward to obtaining the spectrum and rolling out the networks speedily, so that consumer experience can be made seamless and an ambitious and robust blue-print for transforming the digital identity of the country that will be completed on the additional spectrum that has been sold in what has been a successful auction.
e-KYC
  • Another big achievement was the government's release of E-KYC norms. COAI supported and welcomed the decision of the DoT to allow the use of Aadhar e-KYC service of the UIDAI, for issuing connections to mobile subscribers in India.
  • E-KYC will address the problem of fraudulent elements getting telephone connections on forged or fake documents.
  • An Aadhar-based activation process will also bring in process efficiency by supporting the mammoth infrastructure otherwise required for connecting millions of verified citizens.
  • It will give a big boost to the Digital India, mission of the Government of India apart from saving lakhs of trees and addressing the extremely important issue of national security.
  • This system will benefit everyone - consumers, service providers and also TERM Cells and LEAs.
IoT
  • India is yet to witness breakthrough of interconnected devices. A connected ecosystem will act as a catalyst in changing the future of mobile devices and enhancing their utility. More people will move to 4G network in order to benefit from the services that IoT has to offer, making life convenient.
  • By 2020, Internet-connected devices are expected to number between 26 billion and 50 billion globally. IoT through interplay of software, telecom and hardware promises to offer tremendous opportunities for many industries.
  • Fed by sensors soon to number in the trillions, working with intelligent systems in the billions, and involving millions of applications, the IoT will drive new consumer and business behaviour that will demand increasingly intelligent industry solutions such as virtual reality, autonomous vehicles, artificial intelligence and robots, etc.
M2M
  • Machine-to-machine technology has huge potential to disrupt communications in the upcoming years.
  • Telcos will invest huge sums on M2M communications, which is predicted to grow at a staggering rate of 40% annually by the end of the decade.
  • M2M technology offers a variety of benefits, including low power consumption, low cost and effective connection.
  • A forward looking global approach is required with inputs from the private sector to create a conducive regulatory environment for both IoT and M2M to fully achieve their potential as the internet is united, universal, interoperable and global.
GST Bill
  • COAI supported the passing of the GST Bill as this is a significant step towards simplified goods and service taxation, ease in compliance, achieving transparency and improving ease of doing business with the passage of the Constitutional Amendment Bill on GST.

    Top three demands: Lower rate of tax and Uniform rate of tax for telecom services: Telecom service is an infrastructure service designated as an essential service under the Essential Services Maintenance Act, 1968 and is availed by masses. At present, service tax at the rate of 15 percent is payable on telecom services. Any further increase in the rate of tax under GST regime would have a direct impact on increase in costs for the subscribers and would be crippling for the telecom industry as well. Telecom is an essential service and any rates should be decided as such.
  • Single pan-India registration: Model GST law envisages every service provider to obtain registration in each State/ UT from which it provides services. Telecom services are highly regulated and provided in a seamless manner across States/ UT to over a billion customers including B2B and B2C.
  • Concerns around determination of tax liability under GST: The place of supply rules and location of service provider are integral for determining the tax liability. The policy makers have crafted a specific place of supply rule for telecom services, which is step in the right direction and is well appreciated by the industry players. However, the present drafting of provisions pertaining to location of service provider and the place of supply rules for telecommunication services lead to certain amount of ambiguity leading into increased tax uncertainty and disputes.
SUC
  • Recommendation by the Telecom Regulatory Authority of India (TRAI) and lauded the efforts of the Department of Telecommunication (DoT) and the Telecom Commission to implement a flat SUC charge for the industry. Currently, different SUC rates are applicable for spectrum assigned at different points of time. The new norms are expected to bring uniformity and introduce a level-playing field.
  • The decision will not only bring simplification, but will also eliminate the possibility of arbitrage and help reduce the heavy financial burden levied on the industry. Varied SUC rates can cause a lot of ambiguities while entering into transactions pertaining to mergers & acquisition deals, spectrum sharing and spectrum trading. Disparate rates can lead to disputes and create a non-level playing field and arbitrage.

EMF Emissions
  • Delhi High Court dismissed multiple petitions against mobile towers, making it clear that fears of harmful radiation from mobile towers are not based on any scientific evidence. The Court upheld the EMF safety norms implemented by the Government of India, which are one of the most stringent in the world and based on peer reviewed scientific studies approved by such bodies as the World Health Organisation (WHO) and health agencies of many countries, including the UK and Sweden.The court was clear in its judgement that the petitioner was not able to produce any data whatsoever showing any such harmful effects on the health of human beings.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Rajan S Mathews

The author is Director-General, Cellular Operators Association of India (COAI)

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