Key Regulatory concerns India

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Key Regulatory concerns India

• By
• Pradip Baijal
• Chairman
• Telecom Regulatory Authority of India
• 6th SATRC Meeting, Islamabad, 22.09.04

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The Indian Story
Competition Phases of Policy reforms
First phase of reform
Second phase of reform
Third phase of reform
Converged framework
Manufacturing Sector Value Added Services
NTP 1994 Duopoly / Oligopoly in Services
sector Bidding for Licenses Independent
regulator
NTP 1999 Open competition Revenue
sharing Separation of operator and policy
maker Privatisation of incumbent CPP Lowering
ADC

• Unified Licensing Regime
• Unified Access Licensing Regime already
  implemented
• Converged Ministry of ICT
• Communication Convergence Bill 2000

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Competition

• The task of the Regulator is to promote
  competition
• Non discrimination
• Timely Action
• Flexibility - as market matures
• Preparing the ground with various policies
• to address regulatory issues

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What we did in the recent past

• Introduction of Calling Party Pays
• Encouraged aggressive competition.
• ADC lowered from 30 of sectoral revenue to below
  10
• Finalisation of IUC regime tailored to facilitate
  ongoing convergence.
• Encouraged Handset price reduction by permitting
  bundling of handsets with tariff.
• General tariff forbearance, in view of intense
  competition.
• Migration to UASL.

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What was achieved
GROWTH IN CELLULAR SUBSCRIBER BASE WITH FALL IN
TARIFFS
Cellular subscribers and effective tariff per
minute
Lowering of ADC from 30 to 10 of sector revenue
NTP-99
Telecom Tariff Order
CPP introduced
3rd 4th cellular operator
WLL introduced
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Past Present and Future

• Cumulative losses of mobile telephony Rs.7,000
  Crore
• Sector in courts - no ongoing investment
• Number of mobile telephones 13 million after
  eight years of mobile telephony

Last Year

• Sector in profits
• No court cases - huge ongoing investment
• 33.6 million mobile telephones, 12.7 times growth
  than the earlier average yearly growth.
• To reach 100 million mobile subscribers in two
  years
• Similar success in broadband. Key Low entry cost
  and exciting tariff

This Year
We now Dream
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Regulatory Issues addressed by TRAI
Regulatory Tool Box
USO
Comprehensive USO Policy in place
Issues have been addressed through various
regulations and directives One of the few
countries to publish RIO A comprehensive IUC
regime too is in place
Interconnection
Telecom Tariff Order amendments De-regulation
tariffs, starting with cellular
tariffs Monitoring of tariffs
Tariffs
Based on TRAI recommendations, open competition
has been introduced in all sectors including
unified access. ( except Cellular where
there is frequency limitation)
Licensing
End User Quality of Service regulation, Publicly
available customer survey
QoS
Accounting separation, RIO by service providers
with Significant Market Power, Merger issues,
Provide flexible license conditions
Competition
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Key ongoing Regulatory Issues

• Issues relating to Unified license
• Interconnection
• Spectrum management
• Access Deficit Charges
• Tariff rebalancing
• Quality of Service
• Internet and Broadband penetration
• Accounting Separation
• Rural connectivity
• Number Portability

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Unified Licensing

• Why Unified Licensing
• To encourage flexible and efficient growth of
  new applications and services
• Simplify licensing procedure, make operations
  easy
• Reduce legal disputes
• Easy entry and fair transition to the new
  regime.
• Encourage efficient small operators to cover
  rural, remote and telecommunication facilities
  wise less developed areas.
• Unified Access License Regime introduced.
• Full Unified Licensing Regime is under
  consideration.

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Interconnection Issues
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Concerns related to Interconnection in
Multi-Operator Multi-Service environment

• Timely availability of Interconnection from the
  Incumbent
• Point of Interconnection and Point of Handover
• Inter carrier billing
• Complexity in settlement of interconnect usage
  charges
• Sharing of Intelligent Network Platform

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Spectrum Management

• Spectrum is key to growth and spread of telecom
  service in our country in view of,
• Most of the growth coming from mobile.
• New mobile technologies emerging which benefit us
  in various ways.

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Concerns in Spectrum management

• Efficient utilisation of spectrum
• Spectrum allocation procedure
• Spectrum pricing
• Final Recommendations on
• these issues are under process

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Access Deficit Charges

• Relevance in today's scenario

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Access Deficit Charges

• Sharp decline in the prevailing tariffs reducing
  scope to give cross subsidy from long distance
  traffic.
• Need to compensate the access deficit for fixed
  line.

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Key Concerns of ADC

• Amount of ADC
• Period of ADC
• Applicability of ADC amount on types of services
• Should not create regulatory incentive/
  disincentive to any service.
• Who should get the ADC funding
• Mechanisms for collection and distribution of the
  ADC amounts
• Review of existing ADC regime is under process

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Current Regulatory concerns Tariff related
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Vertical Price Squeeze An Anti-Competitive
Conduct

• Charging unreasonably High prices for supply of
  critical inputs to competitors is a competition
  limiting activity.
• And setting wholesale prices for key inputs
  higher than the retail prices is an
  anti-competitive conduct.
•  TRAI does not allow vertical price squeeze

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Quality of Service Issues
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Challenges to QoS implementation

• There is a need to have a Legal / Policy
  framework so as to impart QoS an enforceable
  status
• QoS definitions in the area of converged
  technologies are still emerging
• Customer satisfaction is difficult to measure
  from performance statistics requires a
  subjective survey
• Necessary to build an effective feedback
  mechanism
• Providing QoS assurances in the current mixed
  environment is exceedingly difficult. Each
  service type has a different concept of what
  constitutes high quality

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Internet and Broadband Penetration
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OVERALL ICT PENETRATION IN INDIA STILL LAGS
BEHIND OTHER COUNTRIES
Key internet and broadband indicators
End of year 2003
Korea
Malaysia
India
China
Parameters
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12
0.4
2.5
Internet connections per
100 persons
25
0.4
0.02
1.4
Broadband connections
per 100 persons
0.05
0.56
0.33
0.96
Ratio of Broadband to
Internet Connections
Ratio of internet connections
0.3
0.8
0.9
0.5
to PCs
0.25
15.63
3.07
Charges per 100 kbps ( per month)
7.61
965
4,000
10,000
GDP (US Per capita)
465
month (US)
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Broadband - Success Factors for Development

• Educating the public about Broadband.
• Competition Pro-competitive Regulation.
• Innovations and alternate Technologies.
• Applications and Content.
• Price and Affordability.
• Governments support to promote Broadband.
• Innovative marketing.
• Recommendations on broadband have been sent to
  the Government

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Accounting Separation

• Accounting Separation is significant from the
  regulatory perspective in a multi service, multi
  operator environment
• It creates capability to analyse costs,
  revenues, and capital employed in major areas of
  an operators business.
• Identifying cross subsidisation, Investigating
  predatory pricing, discrimination and other
  anti-competitive conduct.
• TRAI had issued Regulation on accounting
  Separation to call for audited repots on
  Separated Accounts

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RURAL CONNECTIVITY
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RURAL CONNECTIVITY
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Improving Cellular Coverage

• 200 million urban population covering 1700 towns.
• 55-60 of rural areas to be covered by 2006
  accounting for 75 of Population.
• Source As per information given by operators

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TO INCREASE RURAL CONNECTIVITY
NEW PROPOSALS

• Need to improve use of existing Assets
• Improving Cellular Coverage
• Niche Operators
• Reduction in provisioning costs

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RURAL INDIA CAN BE TRANSFORMED

• AFFORDABLE SHARED ACCESS TO WORLD-WIDE-WEB
  THROUGH
• COMMUNITY INTERNET KIOSKS
• ENABLE E-GOVERNMENCE THROUGH EASY ACCESS TO
  CITIZEN
• SERVICES IN TRANSPARENT SPEEDY MANNER
• CREATE RURAL MICRO ENTERPRISES AND ENHANCE RURAL
  GDP
• MAKE RURAL PEOPLE BETTER EDUCATED THROUGH
  E-LEARNING
• PROVIDE BETTER ACCESS TO HEALTH SERVICES
  THROUGH TELE-
• MEDICINE AND E-HEALTH
• ENABLE FARMERS TO GET TIMELY INFORMATION ABOUT
  DEMAND OPTIMUM PRICE FOR THEIR PRODUCTS
• GENERATE EMPLOYMENT DIRECTLY IN INTERNET KIOSKS
  AND BY
• PROVIDING VOCATIONAL TRAINING
• PROVIDE INFORMATION AND DIGITAL ENTERTAINMENT
  SERVICES TO THE RURAL MASSES

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NUMBER PORTABILITY

• Type Of Service
• Only Fixed
• Only Mobile
• Both
• Implementation Of Portability
• Service area wise
• National Level
• Type Of Portability
• Operator Wise
• Location Wise
• Service wise

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Thank You