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Tag: consultation paper

  • TRAI to hold Open House Discussion in Delhi on migration to IP-based networks

    TRAI to hold Open House Discussion in Delhi on migration to IP-based networks

    NEW DELHI: Following the receipt of some responses to its Consultation Paper on the issue, the Telecom Regulatory Authority of India (TRAI) has organised an Open House Discussion on 2 December on migration to IP-based networks.  
     
    TRAI sources said the OHD had been organised as the matter of migration to IP-based networks and requirement of regulatory intervention in IP based interconnection required urgent decision.
     
    The paper had been issued by TRAI on 30 June and later time for responses had been extended to 19 August with counter-comments, if any by 26 August.
     
    The Consultation Paper wanted the opinion of stakeholders on interconnection requirement for application and content service providers; quality of service issues; and various other operational issues- sharing of network elements, emergency numbering etc
     
    Traditional telecommunication systems are migrating towards more powerful and viable internet protocol based telecommunication systems.  Migration to IP based network will result in co-existence of legacy network along with IP based network. The new IP based network as well as its co-existence with legacy network will give rise to several operational, interconnection and quality of service issues which needs to be addressed for the successful migration to IP based networks.
     
    Traditional telecommunications systems are nearing the end of their product lifecycles, and worldwide, operators are strategising whether to repair/ replace these systems or head down a completely new and potentially more viable path — migration towards an Internet Protocol (IP)-based telecommunications systems.

     

    Modern digital technology allows different sectors/services viz. telecom, data, radio and television, to be merged together. This phenomenon, commonly known as convergence, is taking place on a global scale and is drastically changing the way in which both people and devices communicate. The backbones for making such convergence possible are IP-based networks. The opportunities presented by IP based networks are immense and will help the telecom service provider (TSPs) to converge their network infrastructures, provide huge bandwidth, consolidate terminating traffic and reduce long-distance charges.
     
     Integrated consumer devices for providing various services such as telephony, entertainment, security or personal computing are constantly being designed and developed. These are based on communication standard that is independent from the underlying physical connection.

     

    Legacy networks are based on circuit switched technology. In circuit switched networks, calls are routed through a hierarchy of several layers of exchanges. A circuit-switched network creates a dedicated between two nodes in the network to establish a connection. The established connection is thus dedicated for the period of communication between the two nodes. This uses a variety of transmission media; as a result they are technically and operationally complex. This in turn, makes the maintenance and operational costs of legacy networks expensive.
     
    Service providers face a considerable risk in committing significant investment in upgrading the infrastructure for migration towards IP based networks in the current regulatory environment. Service providers who do not migrate to IP based networks face the risk of becoming less competitive, as their costs would be higher in comparison to an operator running a single converged network. Therefore, the migration to IP based network offers both a huge opportunity to service providers, as well as poses some risks.
     
    Major TSPs in India have implemented IP based core transport network for carrying voice and data traffic, by deploying IP/Ethernet elements extending into access and aggregation networks. Data networks are already IP/ Multi-protocol label switching (MPLS) based, with major parts of the network being optical (Dense Wavelength Division Multiplexing (DWDM) or Ethernet instead of Synchronous Digital Hierarchy (SDH)). The present world scenario indicates that IP has become a ubiquitous means of communication, and the total volume of packet-based network traffic has surpassed traditional voice (circuitswitched) network traffic.
     
    Full text of the Consultation Paper is available on TRAI’s website www.trai.gov.in.

     

  • TRAI to host open house meet on broadband issues and how this can be speeded

    TRAI to host open house meet on broadband issues and how this can be speeded

    NEW DELHI: An Open House Discussion (OHD) will be held next week on how broadband can be delivered quickly and what the stakeholders or the government needs to do for this. The OHD is being organised in the capital on 30 October by the Telecom Regulatory Authority of India (TRAI) on a Consultation Paper issued earlier by it on this subject.

     

    It had earlier sought comments by 14 October and counter-comments by 21 October on the questions raised by it. In the paper, TRAI had asked what immediate measures were required to promote wireline technologies in access networks and how the cost per line for various wireline technologies can be minimised.

     

    It also wanted to know the impediments to the deployment of wireless technologies in the access network. Referring to its recommendations on Microwave backhaul, it asked whether there were any other issues which needed to be addressed to ensure availability of sufficient Microwave backhaul capacity for the growth of broadband in the country.

     

    The pricing of Domestic Leased Circuits (DLC) was reviewed in July 2014 and the Regulator wanted to know if there were any other issues which can improve availability of DLC. It sought the specific reasons that Internet Service Providers are proactively not connecting with NIXI, the National Internet Exchange of India.

     

    It asked if the hosting of content within the country help in reduction of the cost of broadband to a subscriber. It also wondered if public sector units were ideal choices for implementing the National Optical Fibre Network (NOFN) project.

     

    It also wanted to know if it is possible to piggyback on the existing private sector access networks so as to minimize costs in reaching remote rural locations. In this connection, it sought views on the major issues in obtaining right of way for laying optical fibre.

     

    TRAI wondered if the Government should consider framing guidelines to mandate compulsory deployment of duct space for fibre/telecommunications cables and space for telecommunication towers in all major physical infrastructure construction projects such as building or upgrading highways, inter-city metros, railways or sewer networks.

     

    What were the impediments to the provision of Broadband by Cable operators, the regulator asked and whether there were any regulatory issues in providing internet facility through Wi-Fi Hotspots.

     

    TRAI, which recently gave its views on spectrum and also sought some clarifications from the Department of Telecom, asked how much spectrum would be required in the immediate future and in the long term to meet the target of broadband penetration.

     

  • Concerned at slow growth of broadband in India, TRAI wants stakeholders to give suggestions

    Concerned at slow growth of broadband in India, TRAI wants stakeholders to give suggestions

    NEW DELHI: Concerned that only 60.87 million broadband connections had been achieved against a target of 175 million connections by 2017, the Telecom Regulatory Authority of India (TRAI) has issued a Consultation Paper to probe the reasons for this slow growth.

     

    One of the questions posed in the 78-page paper is to know the specific reasons that Internet Service providers are proactively not connecting with the National Internet Exchange of India (NIXI) set up in 2002 and what measures are required to achieve this.

     

    TRAI wants to know if the hosting of content within the country helps in reduction of the cost of broadband to a subscriber and what measures are required to encourage content service providers to host content in the data centre situated within India.

     

    It has also sought to know if public sector undertakings are ideal choices for implementing the National Optical Fibre Network (NOFN) project.

     

    The regulator has asked the stakeholders to send their comments 14 October and counter comments by 21 October. TRAI has also said that no further extension will be given.

     

    In its initial remarks, the Paper noted that the country is nowhere near meeting the target for a service which is considered almost a basic necessity in many developed countries. Broadband is helping to deliver a wide range of services, from services directly related to the Millennium Development Goals set by the United Nations, to services in support of broader citizen participation or services leveraged across different sectors to bring more people into the formal economy. Therefore there is an urgent need to review the present policies and its implementation initiated to build infrastructure required for penetration of broadband in the country.

     

    The objective of the Paper is to discuss issues contributing to the poor broadband penetration in India and solicit stakeholders’ views on actions required to be taken both by the Government and the service providers to accelerate the proliferation and use of broadband in the country.

     

    It says India has the intrinsic strengths for an Internet transformation, but concerted efforts are required to address key gaps in the Internet ecosystem.

     

    Consumers, entrepreneurs, enterprises and the Government can play a pivotal role in building a strong Internet ecosystem driven by the country’s young Internet-savvy population and strong local consumption, entrepreneurship and innovation, and a large pool of technically trained human capital. Identification of the impediments to expansion of this ecosystem and addressing these impediments to create an environment to encourage broadband growth is the need of the hour.

     

    The Digital India project aims to offer a one-stop shop for Government services which would use the mobile phone as the backbone for its delivery mechanism. The Rs 1,13,000 crore initiative seeks to transform India into a connected knowledge economy offering world class services at the click of a mouse. Plans to digitally connect the country will be supported by modules on digital literacy in regional languages which the Government plans to run in the next few years.

     

    But to be successful, a broadband policy needs to reflect the requirements of different communities across the country. This means taking a holistic approach and leveraging the opportunities provided by wireline and wireless technology in each part of the network i.e. backbone, backhaul and local access. The implementation of broadband plans and strategies needs to be monitored. Monitoring should be an integral part of broadband plans and strategies – providing an information base for the initial development of plans and strategies as well as for checking the progress of particular policies and programs, and for the evaluation and reassessment of priorities and strategies.

     

    The regulator wants to know what immediate measures are required to promote wireline technologies in access networks and what is the cost per line for various wireline technologies and how can this cost be minimised.

     

    What are the impediments to the deployment of wireless technologies in the access network and how these deployments can be made faster, it wants to know.

     

    TRAI recently released recommendations on Microwave backhaul and it wants to know if some issues were left out to ensure availability of sufficient Microwave backhaul capacity for the growth of broadband in the country.

     

    The pricing of Domestic Leased Circuits (DLC) had been reviewed in July 2014. Apart from pricing, TRAI has asked if there are any other issues which can improve availability of DLC.

     

    Should the awarding of EPC turnkey contracts to private sector parties through International Competitive Bidding (ICB) be considered for the NOFN project, the regulator wants to know.

     

    It also asked if there are any ways in which infrastructure development costs can be reduced and is it possible to piggyback on the existing private sector access networks so as to minimize costs in reaching remote rural locations.

     

    It wonders if the private sector can do something to reduce delivery costs.

     

    It wants to know the major issues in obtaining right of way for laying optical fibre and the applicable charges/ constraints imposed by various bodies who grant permission of right of way.

     

    It wants to know if the Government should consider framing guidelines to mandate compulsory deployment of duct space for fibre/ telecommunications cables and space for telecommunication towers in all major physical infrastructure construction projects such as building or upgrading highways, inner-city metros, railways or sewer networks.  

     

    Do cable operators face impediments to the provision of Broadband by them, it wants to know.

     

    TRAI has asked what measures are required to reduce the cost and create a proper eco system for deployment of FTTH in the access network.

     

    It wonders if there are any regulatory issues in providing internet facility through Wi-Fi Hotspots and the business model for these.

     

    What other spectrum bands which can be unlicensed for usage of Wi-Fi technology or any other technology for provision of broadband, it seeks to know, also wondering how much spectrum will be required in the immediate future and in the long term to meet the target of broadband penetration and what initiatives are required to make available the required spectrum.

     

    How can Government agencies be encouraged to surrender spectrum occupied by them in IMT bands and what should be the time frame for auctioning the spectrum in 700 MHz band, it asks.

  • TRAI extends date for stakeholders’ views on AGR and on licensing of NSOs and SDOs

    TRAI extends date for stakeholders’ views on AGR and on licensing of NSOs and SDOs

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has extended till 7 October the date for written submissions on a pre-consultation paper on ‘delinking of license for networks from delivery of services by way of virtual network operators’.

     

    In this paper, stakeholders have been asked by the TRAI to give their views on their definition of adjusted gross revenue.

     

    The paper is on what the model of agreement is between network service operator (NSO) license and service delivery (SDO) operator license created under the draft National Telecom Policy 2011 will be.

     

    It has asked if this would be left to the market or regulated like mandating NSOs to provide services to SDO licensees and mandating charges etc.

     

    In its policy, the Department of Telecom (DoT) had said that NSOs would be licensed to set up and maintain converged networks capable of delivering various types of services such as voice, data, video, broadcast, IPTV, VAS etc in a non-exclusive and non-discriminatory manner.

     

    SDOs would be licensed to deliver the services such as teleservices (voice, data, video), internet/broadband, broadcast services, IPTV, VAS and content delivery services etc.

     

    In its latest reference to TRAI, the DoT has envisaged the entry of virtual network operators (VNOs) for delivery of services by delinking them from licensing of networks.

     

    VNOs are SDO licensees who do not own the underlying network(s) but rely on the network and support of the infrastructure providers, telecommunications operators (who are owner(s) of towers, radio access networks, spectrum etc) for providing telecom services to end users/customers. As these operators do not have their own networks, they are termed as VNOs. They can provide any telecom service being provided by network providers viz teleservices (voice, data, video), internet/broadband, IPTV, VAS, content delivery services etc. The most popular among VNOs are mobile virtual network operators (MVNOs).

     

    India is a diverse country, large in size and had very poor telecom networks when the Government decided to open the sector to private participation. Therefore, in order to ensure development and proliferation of telecom infrastructure across the length and breadth of the country, the Government took a conscious decision that all TSPs would have their own network for providing services to their customers. To meet this end, each TSP was mandated to comply with certain roll-out obligations and even sharing of infrastructure was not permitted initially. To encourage tower sharing amongst operators, the Government initiated a project ‘Mobile Operator Shared Tower (MOST)’ in March 2006, and later on, in April 2008 sharing of active infrastructure, except spectrum, was also permitted.

     

    At present, most access providers are integrated operators who have their own infrastructure for both access and long distance services. Having already established their networks, the issue to deliberate upon is whether delinking the network from service delivery will have any effect on the working of these TSPs. The new licence regime has come into existence only about a year back.

     

    In the proposed licencing framework, based on the VNO model, one issue could be whether the existing TSPs, will have to obtain an NSO licence or both NSO and SDO licences on migration to the new licensing regime.

     

    A linked issue for deliberation will be about the necessity of changing the licensing regime at all, at such a short interval since unified licencing (UL) was introduced.

     

    At present, there are 7-13 licensees in various service areas. Therefore, another issue for deliberation could be about the need for introduction of more competition in the form of VNOs.

     

    Apart from access services, for other services like V-SAT, PMRTS/CMRTS, GMPCS, it needs to be deliberated whether any business case/revenue potential exists for a standalone virtual operator for these services.

     

    In India, the TSPs have infrastructure, including spectrum, which is just about sufficient to cater to their own requirements. Would they really be able to spare their infrastructure for new SDOs, TRAI wants to know.

     

    It can also be deliberated whether the reference of DoT envisaged an entirely new licensing regime or could be considered to mean that a chapter may be added to the existing UL for facilitating licenses to the VNO.

  • Govt sending wrong signals to foreign investors by delaying digitisation: Rahul Khullar

    Govt sending wrong signals to foreign investors by delaying digitisation: Rahul Khullar

    MUMBAI: Recently, a letter written by Telecom Regulatory Authority of India (TRAI) chairman Rahul Khullar pointed out that the government was committing a mistake by extending the deadline for digitisation. Khullar has many more points to present on the regulator and the industry.

     

    In a conversation with Bloomberg, he said that his views on digitisation were very clear. “It is a very bad decision to defer it. It is bad for digital India, broadband delivery and not in public interest,” he said.

     

    While the government says that its main aim is to push indigenous production of seven crore set top boxes (STBs) in two years, Khullar feels that this is a ‘pipe dream.’

     

    Khullar said that last year several investors met him and conveyed that it was a miracle that they managed to get two crore boxes digitised. They also asked that by when will digitisation be completed because they are desperately interested in investments in cable. “By delaying digitisation, you are sending a signal to foreign investors that India isn’t ready for investment yet. This does great harm to public credibility,” he said.

     

    Meanwhile, rumours are afloat that the government is mulling creation of a ‘super regulator’ that will oversee the communications sector. Khullar believes that it is necessary to keep content and carriage separate. “If your aim is to strengthen TRAI then you don’t need a super regulator, just empower the existing one. But if it is to regulate carriage and content, this is an experiment that hasn’t succeeded in the world,” he said.

     

    According to him, issues concerning content immediately ‘stir up a hornet’s nest’ that usually involves freedom of speech. “My own sense would be to keep carriage and content separate and ensure that the content regulator has nothing to do with the government. Then you have some sort of fighting chance of regulatory survival,” he said.

     

    Broadband is a growing medium of revenue that is catching the attention of all in media space. The TRAI is due to come out with a paper on ‘policy issues relating to broadband’ in the next 10 days. “Broadband and convergence is still five to 10 years away. If we are to deliver broadband we need to know how to do it in the cheapest way, who should be involved, what to be done in terms of application and software development,” he highlighted. It will focus on building infrastructure and delivering content.

  • TRAI extends deadline to respond to consultation paper on AGR

    TRAI extends deadline to respond to consultation paper on AGR

    MUMBAI: The Telecom Regulatory Authority of India (TRAI) has given a fresh lease of life to stakeholders to respond to its consultation paper on ‘Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges.’

     

    The extension has come after some stakeholders  requested for additional time of two weeks to complete the discussions among themselves to develop a unified approach by resolving various contentious issues.

     

    The  Authority has  considered their request and   decided  to  extend the  last date for  submission of  written comments to  15 September and   for counter  comments,  if  any,   to  22 September. TRAI has also clarified that there is no change in the date of the Open House Discussion on the consultation paper and will be held on 1 October in New Delhi.  

     

    It can be noted that the Authority had issued the consultation paper on  ‘Definition of Revenue Base  (AGR) for the  Reckoning of Licence  Fee and Spectrum Usage Charges’ on 31 July 2014 inviting comments  by  1 September and counter-comments by  8 September.

  • One more week to respond to TRAI paper on resolving issue of the controversial AGR for broadcast, telecom

    One more week to respond to TRAI paper on resolving issue of the controversial AGR for broadcast, telecom

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has decided to give one last opportunity to stakeholders to respond to its consultation paper on a review of the definition of Gross Revenue (GR) and the permissible deductions to arrive at Adjusted Gross Revenue (AGR) in the context of the National Telecom Policy 2012 in view of a multitude of cases by both telecom and broadcast operators.

     

    Stakeholders have been given one extra week and can respond to the 24 questions raised by the Authority by 8 September with counter comments if any by 15 September. This is being done in view of the important issues involved, but TRAI said no further opportunities would be given.

     

     The Authority will also examine the components of GR, AGR and minimum presumptive AGR, rates of licence fee and spectrum usage charges, formats of statements of revenue and licence fee, and audit and verifiability of revenue and licence fee.

     

    The paper on ‘Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges’ will also examine the changes made in the licensing regime, the transition from the administrative allocation regime towards market-determined prices for spectrum, and the conclusion of tenure of many licences. The paper provides the relevant background information on the subject covering various issues involved.

     

    On the definition of AGR specifically, the Authority had in 2012 recommended that only the revenue from the wireless services shall count towards AGR calculation for the limited purpose of calculation of Spectrum Usage Charges (SUC) that would continue to be determined on service area basis, and should be levied only in respect of those service areas where the Licensee holds any access spectrum.

     

    TRAI wants to know whether there is a need to review/revise the definition of GR and AGR in the different licences at this stage; the guiding principles for designing the framework of the revenue sharing regime; and whether the rate of licence fee (LF) be reviewed instead of changing the definitions of GR and AGR, especially with regard to the component of USO levy In the interest of simplicity, verifiability, and ease of administration.

     

    The paper also wants to know whether the revenue base for levy of licence fee and spectrum usage charges include the entire income of the licensee or only income accruing from licenced activities if the definitions are to be reviewed/revised.

     

    It has asked whether LF be levied as a percentage of GR in place of AGR in the interest of simplicity and ease of application, and should the revenue base for calculating LF and SUC include ‘other operating revenue’ and ‘other income’.

     

    The government prepared a draft licence agreement for International Long Distance (ILD) services in September 2000 containing a provision that LF was payable as a percentage of revenue. For the Public Mobile Radio Trunk Service (PMRTS) too, the revenue share regime was made applicable from 1 November 2001.

     

    The definition of AGR has been litigated since 2003. TSPs questioned the inclusion of various components of revenue in the reckoning of AGR as well as the legality of the definition before TDSAT. In 2006, TDSAT, after noting that revenue from non-licensed activities needed to be excluded from the reckonable revenue, asked TRAI to make recommendations on the inclusion or exclusion of the disputed items in the AGR. TRAI made its recommendations on 13 September 2006 and the Tribunal gave its final order in the matter on 30 August 2007 after accepting most (but modifying some) of TRAI’s recommendations.

     

     In the course of finalising the recommendations of the Authority on the reference from TDSAT, the views of DoT were obtained by the Authority through its representative and incorporated in the “Recommendations on components of Adjusted Gross Revenue” dated 13 September 2006. The Authority was informed that the basic rationale adopted by the government while formulating the definition of AGR was that it should be easy to interpret – so as to pose fewer problems in application and less disputes and litigations, and to make it less prone to reduction in LF liability by way of accounting jugglery; and it should be easy to verify.

     

    The TDSAT’s judgment of 30 August 2007 was taken in appeal by DoT to the Supreme Court and was set aside by its judgment on 11 October 2011 on the grounds, among others, that TDSAT had no jurisdiction to decide the validity of the terms and conditions of the licence including the definition of AGR incorporated in the licence agreement. It was for DoT – and not TRAI and TDSAT – to take a final decision on the definition of AGR. The Supreme Court also held that a licensee can raise a dispute about the computation of AGR relating to a particular demand and that TDSAT can then examine whether the demand was in accordance with the licence agreement and the definition of AGR. 

     

    The judgment of the Supreme Court settled important points of law and has clarified the nature of the contractual relationship between the government as licensor and the TSPs. The judgment also laid down the parameters of institutional responsibility in arriving at the contractual terms and conditions; it held that: Litigation regarding the computation of LF continues before the TDSAT in the case of individual demands made on TSPs. It has also been reported that writ petitions re-agitating the revenue share definition have been filed by TSPs in different High Courts.

  • TRAI wants to know if methods used for earlier spectrum auctions need change

    TRAI wants to know if methods used for earlier spectrum auctions need change

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) wants to know from stakeholders if additional spectrum in contiguous form in the 900 MHz and 1800 MHz band should be made available and whether only contiguous blocks of minimum 5 MHz spectrum should be put for auction.

     

    In a consultation paper on Valuation and Reserve Price of Spectrum: Licences expiring in 2015–16 issued today, TRAI has also asked what the block size should be to auction the spectrum in (a) 900 MHz band and (b) 1800 MHz band.

     

    The paper, which poses several questions for stakeholders, has to be replied to by 8 September with counter-comments if any by 15 September, after which an Open House would be held on the issue on 22 September in Delhi.

     

    The paper has been issued following a query by the Department of Telecommunications in April this year.

     

    Stakeholders have been asked to give views on what should the minimum quantum of spectrum in the 900 MHz and 1800 MHz band that (a) a new entrant and (b) an existing licensee should be required to bid for.

     

    It also wants to know if the licensee whose licences are due for expiry in 2015 and 2016 should be treated as an existing licensee or as a new entrant and should the valuation exercise for 1800 MHz spectrum be undertaken afresh for all the 22 LSAs.

     

    TRAI wants to know if the prices revealed in the February 2014 auction for 1800 MHz spectrum auction be taken as the value of 1800 MHz spectrum for the forthcoming auction in the respective LSA, and whether it would be appropriate to index it for the time gap (even if this is less than one year) between the auction held in February 2014 and forthcoming auction.

     

    The regulator wants to know the criteria for defining a ‘market clearing price’ and whether the valuation of spectrum and determination of reserve price should be done only for those LSAs where market clearing price was not achieved for 1800 MHz spectrum in February 2014 auction.

     

    Should the auction determined price for LSAs where market clearing price was achieved in February 2014 be taken as equal to the value of spectrum and should the market determined price be taken as the value of spectrum in all LSAs, TRAI wants to know.  

     

    It also wants to know the value of spectrum in the LSAs where market clearing price was not achieved by correlating the sale prices achieved in similar LSAs where market clearing price was achieved with known relevant variables.

     

    Should the value of spectrum in 1800 MHz band be assessed on the basis of producer surplus on account of additional spectrum, and is there any need for a change/revision of any of the assumptions adopted by the Authority in producer surplus, asks TRAI.

     

    It also wants to know whether the revenue surplus approach should be used to arrive at the value of 1800 MHz spectrum and should the values contained in the report of 8 February 2011 for spectrum up to 6.2 MHz be incorporated after indexation in the calculation of the average value of the 1800 MHz spectrum in the current exercise.

     

    Would it be appropriate to value 1800 MHz spectrum as the simple mean of the values thrown up in all the approaches and should the value of 900 MHz spectrum be derived on the basis of the value of 1800 MHz spectrum using technical efficiency factors (1.5 times and 2 times), it wants to know.

     

    Can there be any other method that could be used for arriving at the valuation of the 900 MHz spectrum, it asks. 

  • TRAI issues paper aimed at resolving controversial AGR for broadcast, telecom

    TRAI issues paper aimed at resolving controversial AGR for broadcast, telecom

    NEW DELHI: Following a multitude of cases by both telecom and broadcast operators, the Telecom Regulatory Authority of India (TRAI) has initiated a review of the definition of Gross Revenue (GR) and the permissible deductions to arrive at Adjusted Gross Revenue (AGR) in the context of the National Telecom Policy 2012.

     

    In a Consultation Paper on the subject, the Authority has examined the components of GR, AGR and minimum presumptive AGR, rates of Licence Fee and Spectrum Usage Charges, formats of statements of revenue and licence fee and audit and verifiability of revenue and licence fee.

     

    Stakeholders are expected to respond to the 24 questions raised in the Consultation Paper by 1 September and counter-comments by 8 September. TRAI has made it clear that there will be no extension to these dates.

     

    The paper on Definition of Revenue Base (AGR) for the Reckoning of Licence Fee and Spectrum Usage Charges will also examine the changes made in the licensing regime, the transition from the administrative allocation regime towards market-determined prices for spectrum, and the conclusion of tenure of many licences. The paper provides the relevant background information on the subject covering various issues involved.

     

    On the definition of AGR specifically, the Authority had in 2012 recommended that only the revenue from the wireless services shall count towards AGR calculation for the limited purpose of calculation of Spectrum Usage Charges (SUC) that would continue to be determined on service area basis, and should be levied only in respect of those service areas where the Licensee holds any access spectrum.

     

    TRAI wants to know whether there is a need to review/revise the definition of GR and AGR in the different licences at this stage; the guiding principles for designing the framework of the revenue sharing regime; and whether the rate of licence fee (LF) be reviewed instead of changing the definitions of GR and AGR, especially with regard to the component of USO levy, in the interest of simplicity, verifiability, and ease of administration.

     

    The paper also wants to know whether the revenue base for levy of licence fee and spectrum usage charges include the entire income of the licensee or only income accruing from licenced activities if the definitions are to be reviewed/revised.

     

    It has asked whether LF be levied as a percentage of GR in place of AGR in the interest of simplicity and ease of application, and should the revenue base for calculating LF and SUC include ‘other operating revenue’ and ‘other income’.

     

    The Government prepared a draft licence agreement for International Long Distance (ILD) services in September, 2000 containing a provision that LF was payable as a percentage of revenue. For the Public Mobile Radio Trunk Service (PMRTS) too, the revenue share regime was made applicable from 1 November 2001.

     

    The definition of AGR has been litigated since 2003. TSPs questioned the inclusion of various components of revenue in the reckoning of AGR as well as the legality of the definition before TDSAT. In 2006, TDSAT, after noting that revenue from non-licensed activities needed to be excluded from the reckonable revenue, asked TRAI to make recommendations on the inclusion or exclusion of the disputed items in the AGR. TRAI made its recommendations on 13 September 2006 and the Tribunal gave its final order in the matter on 30 August 2007 after accepting most (but modifying some) of TRAI’s recommendations.

     

    In the course of finalising the recommendations of the Authority on the reference from TDSAT, the views of DoT were obtained by the Authority through its representative and incorporated in the “Recommendations on components of Adjusted Gross Revenue” dated 13 September 2006. The Authority was informed that the basic rationale adopted by the Government while formulating the definition of AGR was that it should be easy to interpret – so as to pose fewer problems in application and less disputes and litigations, and to make it less prone to reduction in LF liability by way of accounting jugglery; and it should be easy to verify.

     

    The TDSAT’s judgment of 30 August 2007 was taken in appeal by DoT to the Supreme Court and was set aside by its judgment on 11 October 2011 on the grounds, among others, that TDSAT had no jurisdiction to decide the validity of the terms and conditions of the licence including the definition of AGR incorporated in the licence agreement. It was for DoT – and not TRAI and TDSAT – to take a final decision on the definition of AGR. The Supreme Court also held that a licensee can raise a dispute about the computation of AGR relating to a particular demand and that TDSAT can then examine whether the demand was in accordance with the licence agreement and the definition of AGR.

     

    The judgment of the Supreme Court settled important points of law and has clarified the nature of the contractual relationship between the Government as licensor and the TSPs. The judgment also laid down the parameters of institutional responsibility in arriving at the contractual terms and conditions; it held that: litigation regarding the computation of LF continues before the TDSAT in the case of individual demands made on TSPs. It has also been reported that writ petitions re-agitating the revenue share definition have been filed by TSPs in different High Courts. 

  • TRAI extends date for responses on migration to IP-based networks

    TRAI extends date for responses on migration to IP-based networks

    NEW DELHI: Even as the issue of migration to IP-based networks and requirement of regulatory intervention in IP based interconnection requires urgency, the Telecom Regulatory Authority of India today extended time on the request of stakeholders to respond to a Consultation Paper issued by it on 30 June.

     

    Stakeholders have been asked to respond by 19 August with counter-comments if any by 26 August.

     

    The consultation paper wanted the opinion of stakeholders on interconnection requirements for application and content service providers; quality of service issues; and various other operational issues- sharing of network elements, emergency numbering etc.

     

    Traditional telecommunication systems are migrating towards more powerful and viable internet protocol based telecommunication systems.  Migration to IP based network will result in co-existence of legacy network along with IP based network. The new IP based network as well as its co-existence with legacy network will give rise to several operational, interconnection and quality of service issues which needs to be addressed for the successful migration to IP based networks.

     

    Full text of the consultation paper is available on TRAI’s website www.trai.gov.in.