Category: TRAI

TRAI begins exercise on common mobile banking for all sectors

NEW DELHI: With consumers gradually getting attuned to it and the growth of Mobile Apps and OTT requiring mobile banking, the Telecom Regulatory Authority of India has started an exercise to find the best way of making or receiving payments through the mobile.

As a first step, it has issued a Consultation paper on regulatory framework for the use of USSD for mobile financial services. Stakeholders have been sent a set of ten questions and have to respond by 31 August with counter-comments by 14 September 2016.

Keeping in view the success achieved by many countries in delivering financial servicesthrough mobile telephone, the Government of India, in November, 2009, constituted an Inter-Ministerial Group (IMG) to submit a report and recommendations on the framework fordelivery of basic financial services using mobile phones. The framework proposed in the IMGreport has been accepted as the basis for delivery of basic financial services using mobile technology by a Committee of Secretaries under the chairmanship of the Cabinet Secretary in April 2010. The IMG framework envisages opening of mobile linked ‘no- frills’accounts, which would be operated using mobile phones. These accounts would be held bybanks and the money would be stored in the banks and not in the users’ mobile phones; thecustomer would be able to perform five basic transactions cash deposit, cash withdrawal,balance enquiry, transfer of money from one mobile-linked account to another, and transferof money to a mobile-linked account from a regular bank account. The IMG framework alsoenvisaged compensation to the key players after taking into account the actual costs incurred bythem. In the IMG framework, TRAI was expected to provide the required regulatory framework governing the quality of service, provisioning and pricing of mobile services for delivery of basicfinancial services.

Mobile financial services can be delivered using any of the following communication modes:
(i) Interactive Voice Response (IVR)
(ii) Short Messaging Service (SMS)
(iii) Wireless Access Protocol (WAP)
(iv) Stand-alone Mobile Application Clients (Mobile Apps)
(v) Unstructured Supplementary Service Data (USSD)
(vi) Using SIM tool Kit (STK)

With about 22.5 crore Jan-dhan accounts in the country, more than 100 crore Aadhar cardissued to the citizens and more than 100 crore mobile connections in the country (of whichabout 45 crore are in rural areas), it was expected that the USSD-based mobile banking servicewould gain popularity amongst the unbanked/ under-banked population (the target masses of financial inclusion) with passage of time and would soon achieve a critical mass. However, evenafter two years since August 2014, when it became available to all GSM subscribers in thecountry, the progress of USSD-based mobile banking is below expectations. In May 2016,only about 37 lakh mobile banking transaction attempts (over USSD channel) reached NPCI’splatform (*99#). Clearly, something is amiss. The situation demands a comprehensive review toensure that the service which has successfully deliver.

August 5, 2016
TRAI begins exercise on common mobile banking for all sectors

NEW DELHI: With consumers gradually getting attuned to it and the growth of Mobile Apps and OTT requiring mobile banking, the Telecom Regulatory Authority of India has started an exercise to find the best way of making or receiving payments through the mobile.

As a first step, it has issued a Consultation paper on regulatory framework for the use of USSD for mobile financial services. Stakeholders have been sent a set of ten questions and have to respond by 31 August with counter-comments by 14 September 2016.

Keeping in view the success achieved by many countries in delivering financial servicesthrough mobile telephone, the Government of India, in November, 2009, constituted an Inter-Ministerial Group (IMG) to submit a report and recommendations on the framework fordelivery of basic financial services using mobile phones. The framework proposed in the IMGreport has been accepted as the basis for delivery of basic financial services using mobile technology by a Committee of Secretaries under the chairmanship of the Cabinet Secretary in April 2010. The IMG framework envisages opening of mobile linked ‘no- frills’accounts, which would be operated using mobile phones. These accounts would be held bybanks and the money would be stored in the banks and not in the users’ mobile phones; thecustomer would be able to perform five basic transactions cash deposit, cash withdrawal,balance enquiry, transfer of money from one mobile-linked account to another, and transferof money to a mobile-linked account from a regular bank account. The IMG framework alsoenvisaged compensation to the key players after taking into account the actual costs incurred bythem. In the IMG framework, TRAI was expected to provide the required regulatory framework governing the quality of service, provisioning and pricing of mobile services for delivery of basicfinancial services.

Mobile financial services can be delivered using any of the following communication modes:
(i) Interactive Voice Response (IVR)
(ii) Short Messaging Service (SMS)
(iii) Wireless Access Protocol (WAP)
(iv) Stand-alone Mobile Application Clients (Mobile Apps)
(v) Unstructured Supplementary Service Data (USSD)
(vi) Using SIM tool Kit (STK)

With about 22.5 crore Jan-dhan accounts in the country, more than 100 crore Aadhar cardissued to the citizens and more than 100 crore mobile connections in the country (of whichabout 45 crore are in rural areas), it was expected that the USSD-based mobile banking servicewould gain popularity amongst the unbanked/ under-banked population (the target masses of financial inclusion) with passage of time and would soon achieve a critical mass. However, evenafter two years since August 2014, when it became available to all GSM subscribers in thecountry, the progress of USSD-based mobile banking is below expectations. In May 2016,only about 37 lakh mobile banking transaction attempts (over USSD channel) reached NPCI’splatform (*99#). Clearly, something is amiss. The situation demands a comprehensive review toensure that the service which has successfully deliver.

August 5, 2016
TRAI extends time for views on opening up DTT to private players

NEW DELHI: With sharing of Prasar Bharati infrastructure remaining a ticklish issue, the Telecom Regulatory Authority has decided to give more time to stakeholdes to respond to its consultation paper on the issue of Digital Terrestrial Transmission (DTT), which has until now remained a monopoly of the public broadcaster Doordarshan.

Sakeholders can now respond with comments by 5 August and counter-comments on12 August, and Trai has said no further time would be given.

The paper issued on 24 June 2016 was aimed at examining opening up DTT to private players in an effort to reach the largest audiences in the country.

indiantelevision.com had earlier reported that the government was in the final stages of this exercise. Later, the website quoted Prasar Bharati Chief Executive Officer Jawhar Sircar has saying that the pubcaster had itself cleared this more than a year earlier, even while pointing out that this would necessitate use of the Prasar Bharati infrastructure.

DD, which presently has exclusive domain over terrestrial broadcasting, ranks amongst the world’s largest terrestrial television networks. It has a network of 1412 analog transmitters that provide TV services through two national channels namely, DD National and DD News. In addition to this, the network also broadcast several regional TV channels over the terrestrial network in a time sharing mode to meet the local and regional needs of people in different parts of the country. All TV channels provided by DD are free-to-air.

DTT for broadcasting TV programme services was first introduced in the UK in 1998 by deploying the first generation DVB-T standard developed by the European Digital Video Broadcasting (DVB) group. Since then, Trai says many new standards have evolved and at this juncture implementation of the second generation standards are underway. The DTT broadcasting spectrum has been harmonized with earlier analog spectrum allocation and therefore DTT makes use of similar analog channel allocations. Latest DTT technologies provide a number of advantages over analog terrestrial broadcasting technology, of which some include better quality TV reception – with enhanced picture and sound performance; eEfficient use of frequency – one DTT transmitter can broadcast multiple TV channels; frequency reuse possible – a single frequency network (SFN) can be implemented to cover a large geographical area; efficient reception of TV channels in portable environment such as on moving vehicles; TV channels can also be received on mobile phones and handheld devices; and the 7 or 8 MHz TV frequency band can accommodate 10-12 Standard Definition (SD) TV channels or it can be employed as a data pipe to deliver different type of services including radio services.

The DTT platform is flexible and content format agnostic – newer formats of TV channels such as HD TV, 3D TV, UHD TV, data and radio services etc. can thus be delivered with reduced transmission power requirements. Digitization also allows for government bodies to reclaim spectrum and repurpose it.

With standardized DTT transmission and clear advantages in terms of effective frequency utilization as well as enhanced TV quality, many countries the world over have laid down clear roadmaps to switch-off analog terrestrial TV transmission with a transition to DTT. In India, though work for changeover from Analog terrestrial transmission to digital terrestrial transmission by DD has already commenced, a clear roadmap is however unavailable.

July 23, 2016
TRAI extends time for views on opening up DTT to private players

NEW DELHI: With sharing of Prasar Bharati infrastructure remaining a ticklish issue, the Telecom Regulatory Authority has decided to give more time to stakeholdes to respond to its consultation paper on the issue of Digital Terrestrial Transmission (DTT), which has until now remained a monopoly of the public broadcaster Doordarshan.

Sakeholders can now respond with comments by 5 August and counter-comments on12 August, and Trai has said no further time would be given.

The paper issued on 24 June 2016 was aimed at examining opening up DTT to private players in an effort to reach the largest audiences in the country.

indiantelevision.com had earlier reported that the government was in the final stages of this exercise. Later, the website quoted Prasar Bharati Chief Executive Officer Jawhar Sircar has saying that the pubcaster had itself cleared this more than a year earlier, even while pointing out that this would necessitate use of the Prasar Bharati infrastructure.

DD, which presently has exclusive domain over terrestrial broadcasting, ranks amongst the world’s largest terrestrial television networks. It has a network of 1412 analog transmitters that provide TV services through two national channels namely, DD National and DD News. In addition to this, the network also broadcast several regional TV channels over the terrestrial network in a time sharing mode to meet the local and regional needs of people in different parts of the country. All TV channels provided by DD are free-to-air.

DTT for broadcasting TV programme services was first introduced in the UK in 1998 by deploying the first generation DVB-T standard developed by the European Digital Video Broadcasting (DVB) group. Since then, Trai says many new standards have evolved and at this juncture implementation of the second generation standards are underway. The DTT broadcasting spectrum has been harmonized with earlier analog spectrum allocation and therefore DTT makes use of similar analog channel allocations. Latest DTT technologies provide a number of advantages over analog terrestrial broadcasting technology, of which some include better quality TV reception – with enhanced picture and sound performance; eEfficient use of frequency – one DTT transmitter can broadcast multiple TV channels; frequency reuse possible – a single frequency network (SFN) can be implemented to cover a large geographical area; efficient reception of TV channels in portable environment such as on moving vehicles; TV channels can also be received on mobile phones and handheld devices; and the 7 or 8 MHz TV frequency band can accommodate 10-12 Standard Definition (SD) TV channels or it can be employed as a data pipe to deliver different type of services including radio services.

The DTT platform is flexible and content format agnostic – newer formats of TV channels such as HD TV, 3D TV, UHD TV, data and radio services etc. can thus be delivered with reduced transmission power requirements. Digitization also allows for government bodies to reclaim spectrum and repurpose it.

With standardized DTT transmission and clear advantages in terms of effective frequency utilization as well as enhanced TV quality, many countries the world over have laid down clear roadmaps to switch-off analog terrestrial TV transmission with a transition to DTT. In India, though work for changeover from Analog terrestrial transmission to digital terrestrial transmission by DD has already commenced, a clear roadmap is however unavailable.

July 23, 2016
TRAI gives more time on responses to Paper on internet telephony which can affect mobile TV, IPTV

NEW DELHI: The Telecom Regulatory Authority of India today decided to give more time to stakeholders to respond to its consultation paper on internet telephony (VoIP).

The paper had noted that unified IP based backbone and the benefits associated with the converged telecom access scenario has enabled service providers to launch more and more converged services such as Internet Telephony, IPTV, Mobile TV etc.

TRAI has now asked stakeholders to respond by 22 August 2016 (which is exactly two months after the paper was issued on 22 June 2016) and give countercomments by 5 September 2016.

The paper has sought to know the format of voice over internet telephony (VoIP) in India.

The authority has pointed out that use of Internet Protocol (IP)-based networks, including the Internet, continues to grow around the world due to the multitude of applications it supports and particularly due to Voice Over IP (VoIP). IP-based networks are capable of providing real-time services such as voice and video telephony as well as non real-time services such as email and are driven by faster Internet connections, widespread take-up in broadband and the emergence of new technologies.

The terms “IP Telephony”, “VoIP”, Internet Telephony and other variants often generates confusion as there are many different definitions used by various organizations. Some use them interchangeably while others give them distinct definitions. Further confusion is caused by using the terms to refer to both the IP-based technologies and the services that are enabled by these technologies.

Convergence is primarily driven by increasing processing power, high capacity memory storage devices, reduced price, lesser power requirement and miniaturization of the devices. High-speed data transfer is now possible which is necessary for delivering innovative and advanced multimedia applications.

Recent trends indicate that Telecom operators are adopting converged platforms to deliver multimedia rich applications containing voice, video and data.

The separation of service provisioning and its management from the underlying network infrastructure in packet based networks is further increasing the acceptability of IP based Networks. It is now possible to separate provision of service contents, configuration and modification of service attributes regardless of the network catering such service. There has been enough evidence to suggest that in future IP networks will play much important role and may ultimately encourage migration of conventional networks towards Next Generation Networks or an All IP Network.

The regulator wants to know what should the additional entry fee, Performance Bank Guarantee (PBG) and Financial Bank Guarantee (FBG) for Internet Service providers be if they are also allowed to provide unrestricted Internet Telephony.

It says the point of Interconnection for Circuit switched Network for various types of calls is well defined, and should the same be continued for Internet Telephony calls or there is need to change Point of Interconnection for Internet Telephony calls.

Trai has asked whether accessing of telecom services of the TSP by the subscriber through public Internet (internet access of any other TSP) can be construed as extension of fixed line or mobile services of the TSP.

It wants to know whether the present ceiling of transit charge needs to be reviewed or it can be continued at the same level.

The regulation has asked what the termination charge should be when call is terminating into Internet telephony network and whether an Internet telephony subscriber be able to initiate or receive calls from outside the SDCA, or service area, or the country through the public Internet thus providing limited or full mobility to such subscriber.

Should the last mile for an Internet telephony subscriber be the public Internet irrespective of where the subscriber is currently located as long as the PSTN leg abides by all the interconnection rules and regulations concerning NLDO and ILDO, asks Trai.

It wants to understand the framework if Number portability is allowed for Internet Telephony numbers.

In case it is not possible to provide Emergency services through Internet Telephony, will it be enough to inform limitation of Internet Telephony calls in advance to the consumers, asks Trai.
Since the 1960’s when digital voice communication first emerged, the Public Switched Telephone Network (PSTN) has been supported worldwide as the primary means of voice communication. The PSTN is a connection-oriented, circuit-switched network in which a dedicated channel (or circuit) is established for the duration of a communication. Originally transmitting only analog signals, the PSTN ultimately switched to digital communication, which offered solutions to the attenuation, noise and interference problems inherent in the analog system. The modern PSTN uses Pulse Code Modulation (PCM) to convert all analog signals into digital transmissions at the originating network and reverses the processes in the receiving network.

July 21, 2016
TRAI gives more time on responses to Paper on internet telephony which can affect mobile TV, IPTV

NEW DELHI: The Telecom Regulatory Authority of India today decided to give more time to stakeholders to respond to its consultation paper on internet telephony (VoIP).

The paper had noted that unified IP based backbone and the benefits associated with the converged telecom access scenario has enabled service providers to launch more and more converged services such as Internet Telephony, IPTV, Mobile TV etc.

TRAI has now asked stakeholders to respond by 22 August 2016 (which is exactly two months after the paper was issued on 22 June 2016) and give countercomments by 5 September 2016.

The paper has sought to know the format of voice over internet telephony (VoIP) in India.

The authority has pointed out that use of Internet Protocol (IP)-based networks, including the Internet, continues to grow around the world due to the multitude of applications it supports and particularly due to Voice Over IP (VoIP). IP-based networks are capable of providing real-time services such as voice and video telephony as well as non real-time services such as email and are driven by faster Internet connections, widespread take-up in broadband and the emergence of new technologies.

The terms “IP Telephony”, “VoIP”, Internet Telephony and other variants often generates confusion as there are many different definitions used by various organizations. Some use them interchangeably while others give them distinct definitions. Further confusion is caused by using the terms to refer to both the IP-based technologies and the services that are enabled by these technologies.

Convergence is primarily driven by increasing processing power, high capacity memory storage devices, reduced price, lesser power requirement and miniaturization of the devices. High-speed data transfer is now possible which is necessary for delivering innovative and advanced multimedia applications.

Recent trends indicate that Telecom operators are adopting converged platforms to deliver multimedia rich applications containing voice, video and data.

The separation of service provisioning and its management from the underlying network infrastructure in packet based networks is further increasing the acceptability of IP based Networks. It is now possible to separate provision of service contents, configuration and modification of service attributes regardless of the network catering such service. There has been enough evidence to suggest that in future IP networks will play much important role and may ultimately encourage migration of conventional networks towards Next Generation Networks or an All IP Network.

The regulator wants to know what should the additional entry fee, Performance Bank Guarantee (PBG) and Financial Bank Guarantee (FBG) for Internet Service providers be if they are also allowed to provide unrestricted Internet Telephony.

It says the point of Interconnection for Circuit switched Network for various types of calls is well defined, and should the same be continued for Internet Telephony calls or there is need to change Point of Interconnection for Internet Telephony calls.

Trai has asked whether accessing of telecom services of the TSP by the subscriber through public Internet (internet access of any other TSP) can be construed as extension of fixed line or mobile services of the TSP.

It wants to know whether the present ceiling of transit charge needs to be reviewed or it can be continued at the same level.

The regulation has asked what the termination charge should be when call is terminating into Internet telephony network and whether an Internet telephony subscriber be able to initiate or receive calls from outside the SDCA, or service area, or the country through the public Internet thus providing limited or full mobility to such subscriber.

Should the last mile for an Internet telephony subscriber be the public Internet irrespective of where the subscriber is currently located as long as the PSTN leg abides by all the interconnection rules and regulations concerning NLDO and ILDO, asks Trai.

It wants to understand the framework if Number portability is allowed for Internet Telephony numbers.

In case it is not possible to provide Emergency services through Internet Telephony, will it be enough to inform limitation of Internet Telephony calls in advance to the consumers, asks Trai.
Since the 1960’s when digital voice communication first emerged, the Public Switched Telephone Network (PSTN) has been supported worldwide as the primary means of voice communication. The PSTN is a connection-oriented, circuit-switched network in which a dedicated channel (or circuit) is established for the duration of a communication. Originally transmitting only analog signals, the PSTN ultimately switched to digital communication, which offered solutions to the attenuation, noise and interference problems inherent in the analog system. The modern PSTN uses Pulse Code Modulation (PCM) to convert all analog signals into digital transmissions at the originating network and reverses the processes in the receiving network.

July 21, 2016
TRAI open house on DAS interconnect opens up differences amongst stakeholders

NEW DELHI: An Open House Discussion (OHD), organised by regulator TRAI on inter-connection framework for broadcasting TV services distributed through addressable systems (DAS), brought out the fact that yawning gaps still exist between broadcasters and distribution platforms.

The OHD, organised on Wednesday to garner final viewpoints of stakeholders after they have already submitted their stand on the issue, highlighted that the industry is still fighting for short to medium term gains instead of seeing the big picture.

While the broadcasting fraternity stood its ground saying, by and large, that interconnect agreements are private matters between two parties after mutually agreeing on certain terms, distribution platforms maintained that “more transparency is needed.”

“How can it be that a matter related to a broadcaster is private and nobody can ask about them, while those relating to us (distribution platforms) are supposed to be made public?” Jawahar Goel, managing director, Dish TV asked.

Goel’s probing query came after Star India, quoting various laws and regulations, said that the regulator should not encroach upon or erode broadcasters’ “right to freedom of contract in negotiating with distribution platform operators (DPOs).”

In its submission Star India had said, “The proposed regulations must allow freedom to negotiate to broadcasters so as to meet the peculiar demands of the market. Universal treatment to all seekers of signals— despite intelligible differences — is not an obligation imposed by law nor is it desirable.”

Issue like discounts offered by broadcasters, pay channels turning FTA, cloning of existing content to start another TV channel, regulation of OTT platforms managed and owned by broadcasters, cost of spectrum charges paid by consumers for accessing OTT services, the vagueness of interconnect agreements without geographical locations mentioned and the pitfalls of a proposed Interconnect Management System (IMS) whereby commercial data and information could be put in an encrypted form in limited public domain were amongst many issues brought up by stakeholders.

Pointing out broadcasters “impose stringent packaging restrictions” on DPOs, Videocon d2h, expressed its concerns on HD channels and their pricing, highlighting the fact that the difference in cost of the same content in standard definition and high-definition is hard to explain to price-sensitive consumers.

While TRAI chairman RS Sharma in the beginning observed that transparency, non-discrimination and consumer interests were paramount, amongst other things, when the regulator proposes a regulation, some MSOs and LCOs (led by a vocal Roop Sharma of Cable Operators’ Federation of India) vociferously said it’s transparency that’s lacking.

Dish TV also highlighted the discrimination between the licensing regime of DTH operators and cable ops — DTH licensee pays an annual fee, while a cable op doesn’t pay any licence fee on registration .

Bharti Telemedia, part of the telecoms-to-media giant Bharti group, reiterated Dish TV’s point on DTH ops being treated differently saying a “non-level playing field amongst the various types of service providers” exists.

In its submission to the TRAI earlier, Bharti had stated that DTH operators pay a higher tax of 34.5% and have a transparent business operation, while “digital cable operators, who have a similar nature of business, are not transparent and are also not liable to pay any licence fee.”

Though global trends indicate there’s convergence of services and service providers, in India there seems to be hardly any convergence of ideas or consensus amongst the various stakeholders and this would make any regulator’s job that much tougher. Unless one leaves market dynamics to take care of many issues that were raised at the OHD.

July 14, 2016
TRAI open house on DAS interconnect opens up differences amongst stakeholders

NEW DELHI: An Open House Discussion (OHD), organised by regulator TRAI on inter-connection framework for broadcasting TV services distributed through addressable systems (DAS), brought out the fact that yawning gaps still exist between broadcasters and distribution platforms.

The OHD, organised on Wednesday to garner final viewpoints of stakeholders after they have already submitted their stand on the issue, highlighted that the industry is still fighting for short to medium term gains instead of seeing the big picture.

While the broadcasting fraternity stood its ground saying, by and large, that interconnect agreements are private matters between two parties after mutually agreeing on certain terms, distribution platforms maintained that “more transparency is needed.”

“How can it be that a matter related to a broadcaster is private and nobody can ask about them, while those relating to us (distribution platforms) are supposed to be made public?” Jawahar Goel, managing director, Dish TV asked.

Goel’s probing query came after Star India, quoting various laws and regulations, said that the regulator should not encroach upon or erode broadcasters’ “right to freedom of contract in negotiating with distribution platform operators (DPOs).”

In its submission Star India had said, “The proposed regulations must allow freedom to negotiate to broadcasters so as to meet the peculiar demands of the market. Universal treatment to all seekers of signals— despite intelligible differences — is not an obligation imposed by law nor is it desirable.”

Issue like discounts offered by broadcasters, pay channels turning FTA, cloning of existing content to start another TV channel, regulation of OTT platforms managed and owned by broadcasters, cost of spectrum charges paid by consumers for accessing OTT services, the vagueness of interconnect agreements without geographical locations mentioned and the pitfalls of a proposed Interconnect Management System (IMS) whereby commercial data and information could be put in an encrypted form in limited public domain were amongst many issues brought up by stakeholders.

Pointing out broadcasters “impose stringent packaging restrictions” on DPOs, Videocon d2h, expressed its concerns on HD channels and their pricing, highlighting the fact that the difference in cost of the same content in standard definition and high-definition is hard to explain to price-sensitive consumers.

While TRAI chairman RS Sharma in the beginning observed that transparency, non-discrimination and consumer interests were paramount, amongst other things, when the regulator proposes a regulation, some MSOs and LCOs (led by a vocal Roop Sharma of Cable Operators’ Federation of India) vociferously said it’s transparency that’s lacking.

Dish TV also highlighted the discrimination between the licensing regime of DTH operators and cable ops — DTH licensee pays an annual fee, while a cable op doesn’t pay any licence fee on registration .

Bharti Telemedia, part of the telecoms-to-media giant Bharti group, reiterated Dish TV’s point on DTH ops being treated differently saying a “non-level playing field amongst the various types of service providers” exists.

In its submission to the TRAI earlier, Bharti had stated that DTH operators pay a higher tax of 34.5% and have a transparent business operation, while “digital cable operators, who have a similar nature of business, are not transparent and are also not liable to pay any licence fee.”

Though global trends indicate there’s convergence of services and service providers, in India there seems to be hardly any convergence of ideas or consensus amongst the various stakeholders and this would make any regulator’s job that much tougher. Unless one leaves market dynamics to take care of many issues that were raised at the OHD.

July 14, 2016
TRAI sticks to earlier position of flat regime rather than a slab-based one for spectrum

NEW DELHI: The Telecom Regulatory Authority of India has reiterated its earlier “consistent position” that the Spectrum usage charge (SUC) must transition from a slab-based regime to a flat ad valorem regime.

The ease of implementation, level playing field, encouragement to bidders to participate in the auction are key rationales for such a position being taken, the regulator has said in its response to a letter received from the Department of Telecom following TRAI’s earlier recommendations of 27 January this year.

TRAI points out that the trading of spectrum is now happening and would gain momentum in due course. It said merger and acquisition would also take place in the sector in the near future going by recent media reports. All this would make the SUC regime more complex and would need an intricate and large system for smooth implementation, it reiterates.

The Cellular Operators Association of India has also supported a flat rate instead of a slab-based one.

At the same time, TRAI has suggested a separate formula for computation of the charges according to the weighted average method, as against the one considered by the Telecom Commission.

“While the optimal solution in the view of the Authority is to move to a flat rate regime, we are constrained to limit ourselves to examine the weighted average solution as suggested by the Attorney General and proposed by DoT,” Trai said in its letter to the Department of Telecommunications (DoT).

The Attorney-General had said “the contract which emerged after the 2010 auction and which is legally binding on both parties, does not permit the Government to change the SUC for BWA unilaterally.” As the Revenue cannot be segregated for each band, there is difficulty in finding a multiplicand for the SUC rate for that band. As an alternate solution, the Attorney General recommended that the Weighted Average of SUC rates across all spectrum bands, including BWA Spectrum obtained in the 2010 auction, should be employed on an operator-wise basis to calculate the SUC in a legally valid manner.

Trai has recommended that the DoT should also include several alternate factors such as last market-determined price and technical efficiency of spectrum bands to arrive at the weighted average for computing the SUC. The telecom watchdog said that if the spectrum quantity in a band was the only weightage for calculating weighted average formula, it may lead to certain shortcomings.

“Part of this shortcoming is based on the fundamental difficulty of using a proxy – any proxy, on which a weighted average computation is based, will not exactly map the revenue earned by each TSP (telecom service provider) from each band,” Trai said in its letter.

The Telecom Commission had cleared a proposal to use weighted average formula for calculating spectrum SUC based on the total spectrum holding, for all bands allocated to telecom operators.

DoT had requested the Authority to provide recommendation on SUC in the context of valuation and reserve price of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz spectrum bands.

In January, TRAI had recommended rates for auction of spectrum in the 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 Mhz bands.

July 13, 2016
TRAI sticks to earlier position of flat regime rather than a slab-based one for spectrum

NEW DELHI: The Telecom Regulatory Authority of India has reiterated its earlier “consistent position” that the Spectrum usage charge (SUC) must transition from a slab-based regime to a flat ad valorem regime.

The ease of implementation, level playing field, encouragement to bidders to participate in the auction are key rationales for such a position being taken, the regulator has said in its response to a letter received from the Department of Telecom following TRAI’s earlier recommendations of 27 January this year.

TRAI points out that the trading of spectrum is now happening and would gain momentum in due course. It said merger and acquisition would also take place in the sector in the near future going by recent media reports. All this would make the SUC regime more complex and would need an intricate and large system for smooth implementation, it reiterates.

The Cellular Operators Association of India has also supported a flat rate instead of a slab-based one.

At the same time, TRAI has suggested a separate formula for computation of the charges according to the weighted average method, as against the one considered by the Telecom Commission.

“While the optimal solution in the view of the Authority is to move to a flat rate regime, we are constrained to limit ourselves to examine the weighted average solution as suggested by the Attorney General and proposed by DoT,” Trai said in its letter to the Department of Telecommunications (DoT).

The Attorney-General had said “the contract which emerged after the 2010 auction and which is legally binding on both parties, does not permit the Government to change the SUC for BWA unilaterally.” As the Revenue cannot be segregated for each band, there is difficulty in finding a multiplicand for the SUC rate for that band. As an alternate solution, the Attorney General recommended that the Weighted Average of SUC rates across all spectrum bands, including BWA Spectrum obtained in the 2010 auction, should be employed on an operator-wise basis to calculate the SUC in a legally valid manner.

Trai has recommended that the DoT should also include several alternate factors such as last market-determined price and technical efficiency of spectrum bands to arrive at the weighted average for computing the SUC. The telecom watchdog said that if the spectrum quantity in a band was the only weightage for calculating weighted average formula, it may lead to certain shortcomings.

“Part of this shortcoming is based on the fundamental difficulty of using a proxy – any proxy, on which a weighted average computation is based, will not exactly map the revenue earned by each TSP (telecom service provider) from each band,” Trai said in its letter.

The Telecom Commission had cleared a proposal to use weighted average formula for calculating spectrum SUC based on the total spectrum holding, for all bands allocated to telecom operators.

DoT had requested the Authority to provide recommendation on SUC in the context of valuation and reserve price of spectrum in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz spectrum bands.

In January, TRAI had recommended rates for auction of spectrum in the 700 Mhz, 800 Mhz, 900 Mhz, 1800 Mhz, 2100 Mhz, 2300 Mhz and 2500 Mhz bands.

July 13, 2016