In the third episode of the webinar series, Desh Ki Digital Udaan, a panel of industry experts looked at how legal, policy and regulation can help in building a framework for investments, innovations and digital trust.
Policy and Regulation have always play a crucial role in the telecommunication industry. There were multiple government initiatives taken to support the industry over the period of 25 years. We have come a long way since 1995, however we still need to see how the regulatory decisions and interventions guided by NDCP 2018 will support and revive the telecom industry and its related verticals to facilitate framework for Investments, Innovation and Digital Trusts.
The keynote address was delivered by Hari Ranjan Rao, IAS Joint Secretary (T), Department of Telecommunications, and the discussion moderated by KS Rao, CEO of Network Services & Software Business, Sterlite Technologies (STL).
The participants were SK Singhal Advisor-Broadband & Policy Analysis, TRAI; P Balaji Chief Regulatory and Corporate Affairs Officer, Vodafone Idea Limited; Rahul Vatts Chief Regulatory Officer, Bharti Airtel; Vishaka Saigal Vice President & Head – Strategic Initiatives, Regulatory Policy & Research, Reliance Jio Infocomm Limited; and Anku Jain Managing Director, MediaTek.
The webinar was organised by COAI and IMC Studio in association with DoT. Communications Today was one of the media partners.
Hari Ranjan Rao
“25 years ago, none of us had ever imagined that one day mobile telephony would become the backbone of our lives. With 96 percent of India covered by mobile phones, and that too by 4G technology, we do not need to worry about the future course of action.
However, moving forward, as more and more people come into the digital media fold, we will need to give a big push to fixed line broadband connectivity and optical fiber based communications, to take away a major load from spectrum, a natural limited resource.
The National Broadband Mission (NBM), set up in Dec 2019 will ensure that every household in India gets high speed broadband speed. NBM not only envisions laying of optical fibre in every nook and corner of the country but also increasing the tower density, the fiberization of towers, and creating a national fibre grid, so that the existing towers get good quality optical fibre connectivity as a backup.
From the rollout perspective, the 5G rollout in the country will be a game changer. Creating demand and creating awareness on the use of optical fibre as a media of communication for will be another major activity for the NBM.
We have not been able to proliferate fixed broadband so far, primarily because of the resistance to RoW by the states and local bodies. However, now more than 16 states have adopted the Indian Telegraph RoW Rules and others are also in the process. A mindset change is required, that laying of optical fibre be viewed as an enabler, and not a source of revenue.
In spite of the financial stress and churn the sector has gone through over the past few years, I am very optimistic of the future investment expected from this sector. The way new-generation companies and startups are expected to overtake adoption of 5G and other technological options will unleash the real talent that is available in India.
DoT, on its part will continue to play a very positive and proactive role in giving space to develop and innovate.”
“It is the USD 150 billion investment in world class infrastructure by the telecom service providers, in spite of the lowest ARPU in the world in the last 25 years that has made seamless connectivity possible in the pandemic, and it shall continue to play an important role in Digital India and contribution to GDP growth.
The government has taken several policy initiates in the last two decades. This includes the National Telecom Policy 1994, and its subsequent versions and the NDCP unveiled in 2018, that has brought the focus to moving from a telecom situation to a digital era. It will shape the new regulatory policies and help support the investments required for taking the telecom industry to a healthy and stable status, which leads us to today’s panel discussion.
Understanding the changing dynamics of the legal policy and regulation in building the framework, which is constantly looking at innovation and investments and digital trust.”
On administrative bottlenecks continuing to be key constraints for rollout of networks.
“I want to emphasize that the administrative bottlenecks to rollout of network in digitalization is not unique to India. World over, policy makers, regulators and industry participants are working together to resolve this crucial issue. This issue gains enormity in India because we do not have other infrastructure as common duct infrastructure, that exist in other parts of the world.
In spite of the RoW rules issued by the DoT and Central Government, way back in 2016 for a single window and time bound clearance, issues remain. TRAI continues to be in consultation with the stakeholders through its consultation paper, Roadmap to promote broadband connectivity & enhanced broadband speed.
Multiple stakeholders are in play and thus it becomes a complex issue. There is a three-layer structure in India, the central government, the state government and local bodies that have a critical role in providing permissions. Multiple agencies of the government, like roadways, railways, highways, forest, electricity etc and multiple utility companies approach them for RoW permissions. This is not easy to resolve in the given environment.
I suggest a collaborative method, a collaborative platform, that must be established in addition to the directive already issued by DoT. Once TRAI receives the response from the various stakeholders, it shall send in its recommendations to the government.”
“The government, regulator, and industry players are in continuous dialogue to ensure that Indian citizens can get the latest technologies and innovations, whether it be blockchain or IoT. Several proactive steps have been taken and the industry has done a world-first implementation of blockchain-based UCC services. All the operators collaborated with the regulator, innovative companies were involved in the ecosystem to create a platform that allows for the telecom customers to take only those services that they opted for. The use of blockchain has revolutionized our offerings to customers and I have not experienced any regulatory or legal roadblock because of the open consultation facilitated by DoT and TRAI. I think that the regulators have taken really good steps and going ahead, we will have better technology for smart governance, smart cities, education, telemedicine, etc.”
On increased data consumption, data privacy is an issue of concern.
“As a consumer and as a service provider, there is a great emphasis on data privacy. We are already bound by strict licensing conditions which require us to ensure consumer privacy and storage of the personal information of our customers.
I urge that the issue of privacy and security of personal data is not just limited to the TSPs, the issue is equally critical for any customer who shares personal information with the banks, financial institutions or any other commercial entity. He expects the same level of protection to be provided for the information. In the internet services sector, the TSPs, the OTT providers, content providers, equipment manufacturers, entities dealing with smartphone operating systems, browsers all operate in the same internet ecosystem. And thus the data protection and customer rules should be uniform and must involve all stakeholders, operating within the ecosystem, irrespective of the technology and the services being provided by them.”
In the backdrop of a USD 40 billion telecom equipment manufacturing sector, the focus of India is shifting on becoming Atamnirbhar, from semiconductor chips to the 5G solutions. Cost is an advantage, but with the shift of moving into a technology space, what should India do to move forward?
“To make things happen in India, the industry players need to come together and ensure that we are able to digitally empower the masses in India.
Meditek is a chipset company designing for smartphones, tablets, and routers, all the equipment that is being used in the current pandemic.
We really need to become independent in our manufacturing ability. Mediatek is cooperating with several Indian players and OEMs so that we are able to further integrate the Make in India theme.
From the industry side, 5G itself is an important aspect of the digital technology revolution. We are still waiting for that to happen in India. This will place India on a strategic advantageous position. It is important that the government and the industry come together and ensure the success of this.
Ten years back, 4G unleashed innovations and never-heard before mobile applications. Similarly, 5G will unleash the next level of innovation in India and to delay this deployment, will place India in a very disadvantageous position. 5G is very important and I look forward to the government playing its role in expediting 5G services.
Regarding Make in India, we are very optimistic to become Atamnirbhar very soon. At the same time, we have seen that in the current pandemic many companies have realized that they cannot be dependent on certain geographies only, as it impacts their supply chain and business. Worldwide, the companies are looking for alternate geographical locations, which is a great opportunity for India and ensure that we are able to take up some of that manufacturing pie and bring it to India. This holds a golden opportunity for us.”
On expectations from regulatory stand point to make the shift happen in the speed that the country is looking forward to.
“Thanks to the collective efforts of the government, regulator and industry, we have made rapid strides in technology evolution, from older technologies to 4G. We have seen how 4G has transformed the lives of millions of Indians in a very positive manner, in a short span. We are now preparing for the 5G wave.
Having said that, there is a still lot of ground to be covered from the regulatory and policy stand point. Certain measures in the right direction are needed, which can fuel the next wave of digital growth in India. Firstly, there is an immediate need to push for digital inclusiveness in the true sense. On one hand, we are talking about 5G, and on the other hand, we have 300 million 2G subscribers who are deprived from any benefits from the data revolution. The government should consider the measures for incentivizing migration from 2G to newer technologies. It could also consider measures around making 4G handsets more affordable and leveraging the USO Fund. This will further remove the barriers for the adoption of newer technologies. But surely narrowing this digital divide has to be a policy imperative for the government.
When we talk about 5G, we all understand that it is about creating an entire ecosystem and not just about network and connectivity. Today, both the government and the industry are aspiring to make India as one of the world leaders in 5G technology. But to make that happen, what is required is that we need to have absolute clarity in overall regulation and license conditions and also it is imperative to address all the critical policy issues, which can have a bearing on 5G adoption. For instance, net neutrality, vertical specific regulations, cyber security, cloud services, impediments for active infrastructure sharing; all of them impact various elements of the 5G ecosystem.
We all understand 5G as a technology and that network slicing is a key feature, which allows telecom operators to offer varying levels of quality of services for different applications and functions, depending on the criticality. Thus, it becomes very important to relook at the contours of net neutrality in light of 5G, to actually maximize the benefits and potential of 5G.
Also, 5G and emerging technologies have application across sectors. Thus it becomes very important to review the regulatory framework across verticals, whether it is about the much needed provisions around data protection, customer data privacy, or national security-related provisions, it is important to have a harmonized approach to ensure that there is no conflict later on that can hinder the uptake of 5G technology.
Regarding an important impediment against active infrastructure sharing, currently, applicability of huge taxes and levies on the revenues that we earn from such services is a major hindrance for TSPs and this needs to be relooked because in a 5G environment, optimizing resources becomes critical, especially when we are talking about implementation of 5G in rural areas.
In light of evolving technology and services landscape-it also becomes important to relook at the definition of AGR, which is also one of the policy reforms and recommendations which is outlined and suggested by NDCP. If we are successfully able to look at addressing all these policies and hurdles and if we can create an unambiguous regulatory environment, while sticking to light-touch regulatory framework, I am confident that as a country, India will be a world leader in implementation of 5G, as well as in adoption of 5G, and these emerging technologies.”
On how the policy will be structured to provide broadband connectivity to 600,000 villages and connect them by optical fibre and also on the provision of universal broadband connectivity of 50Mbps to each citizen of India.
“The government has set a very ambitious target of providing 50Mbps broadband connectivity by 2022 to each citizen, and although we have grown from 100 million broadband connections in 2015 to 700 million in 2020, concerns remain. Out of 1.2 billion customers, we only have 700 million broadband customers, have lot of ground to cover. Also, the average speed achieved is only 12 Mbps vis-à-vis the requirement of 50 Mbps.
The DoT has stated its targets in the National Broadband Mission. The TRAI has given high importance to the proliferation of the Public Wi-Fi networks to be able to offload cellular traffic on the Wi-Fi hotspots, which are under consideration by the government.
Infrastructure sharing will play a big role in 5G as well as currently in 4G. We have recently given recommendations to the government to increase the scope of the infrastructure providers so they can install and operate active infrastructure and also provide support to the telcos, to facilitate a faster rollout of the broadband networks.”
On NDCP 2018 and how the regulatory intervention will facilitate the industry to transform this sector.
“The NDCP is a fantastic document. It has three pillars, Connect, Propel and Secure India. A lot of work has started on the Connect India side. Likewise on the Propel India part, initiatives need to be taken. If USD 100 billion investment into the digital economy is required to be made, a robust and a financially strong industry is a must. Steps must be taken in that direction, whether it is unblocking the GST input credit, or reducing the amount of bank guarantees that need to be given, or reducing taxes and levies, so that more money is available in the hands of the industry to continue to invest in the network. Once that is done, there will be a multiplier effect on the economy, and it will give a huge impetus to growth in India and revenues to the government.
This has to be with a light-touch regulatory framework, which allows for lower taxation than we have currently. To have the lowest tariffs in the world, maximum consumption in the world, needing to bring another USD 100 billion investment, and having the highest taxation, that aspect is understood, needs to be implemented step by step, in order to ensure that the industry continues to invest to achieve the digital vision of the prime minister of India.”
On what are the service providers doing to ensure that unconnected people, get connected.
“The industry has always been open to deploy the latest technologies as well as enhance experience of the customers. As per the government plan, 1.5 lakh gram panchayats have been connected, with about 4.5 lakh km fibre. However, we have noticed a lack of utilisation and demand for this infrastructure in rural India.
One of the ideas that we have suggested is that the government could prioritise fibre densification in top 100 towns. It seems these are the customers who want connectivity and are able to pay more, thus creating a viable economic model to spread and expand in the rural areas as well.
Some important aspects which need to be looked into are:
- The RoW permission under a single window clearance;
- Implementation of the 2016 Rule pending since long;
- Mandatory provision of ducts and other infrastructure in new buildings;
- Allowing the structural aerial fibre for rapid rollout in dense urban environment and difficult areas;
- Allowing the use of electricity boards, poles, metro pillars gas pipelines for light-weight optical fibre to be clamped onto them; and
- The telecom operators must be intimated on any digging happening, to avoid disconnection at the customer end.
Waiving of the licence fees at least on all wireline technologies and nominal GST on the revenues are some very important factors required for leapfrogging into the rural broadband densification.”
On overall view on spectrum policy
“The industry is eagerly waiting for the spectrum policy to be announced, as it will give impetus to investments in telecom infrastructure. 5G is not only about bandwidth, it is also about low latency and applications which will help in rural healthcare and in many other aspects. They will close the rural-urban gap to a large extent. These policies will go a long way in making way for a new India which we are all hoping for.”
The NDCP policy not only sets the capital outlay required in the country for creating infrastructure but also comes with a lot of ambitious digital connectivity targets. With your experience in Jio of connecting people through digital networks, how are we progressing toward the large targets of achieving digital connectivity.
“As a policy framework NDCP is progressive and forward looking, and if implemented in the right manner, it has the potential to make India as one of the leading digital economies in the world.
However, if we have to meet the ambitious targets set up by NDCP, and if we really want to achieve the overall vision of USD 1 trillion digital economy, it is imperative to make the much-needed investments in creating and enhancing communications infrastructure in India. So, whether we are talking about the target of universal broadband coverage at 50 Mbps to every citizen or whether it is provisioning 10 Gbps to all gram panchayats or whether we are talking about increasing the fiberization levels in India, all of them entails significant investments.
In fact, NDCP itself talks about the need for infusing USD 100 billion, and if you look at the entire quantum of investments, 90 percent of this is envisaged to be catalysed by the private sector and 10 percent from the government. Then it becomes even more important to create a conducive and supportive environment which can help the industry in channelizing these investments in creating the network infrastructure.
Some immediate measures in the right direction from the government can surely help in this direction. The need for rationalizing the existing levies and taxes, whether it is spectrum usage charges, license fee, USO levy, existing GST levels, the current regime is excessive and not aligned with the international norms. And NDCP also recognizes the need for relooking these taxes and levies. Easing this regulatory burden will pave a way for immediate infusion of funding the sector.
Secondly, it is important to resolve the issue of high RoW charges and bring about some uniformity. Our government has done a great job in coming out with the RoW guidelines in 2016, but unfortunately there are a lot of states which are not aligned with it and if as TSPs we continue to pay these exorbitant levies to the municipalities to just seek permission, it will seriously decelerate fiberization, which is critical to achieve any of the targets which are set by NDCP.
One of the suggestions is that the need to create a centralized integrated platform to start a way, at least it will give some kind of transparency in the RoW process and clearances.
Thirdly, more than ever before we need an optimal pricing regime which is appropriately benchmarked to international prices. Unreasonable or exorbitant spectrum prices will hinder the ability of TSPs to invest in the much-needed network infrastructure. And also, the allied infrastructure like cloud, data centers, which is also critical in the 5G or the next-gen technology environment. With respect to 5G spectrum current base prices, which are recommended to be re- considered if we have to actually ensure economic viability.
From a rural broadband perspective, the government has definitely put in a lot of efforts and recently launched National Broadband Mission. But there is a need for further expansion of this broadband infrastructure and create last mile connectivity in the rural areas. For that, we have to look at improving the efficacy of BharatNet. We need to come out with workable strategies or a plan for connection maintenance and for enhancing the utilization of BharatNet bandwidth and what we need is a collaborative PPP model, which ensures both risks and rewards are equally shared between the government and the private sector.
Lastly, all of us are putting in efforts in launch wired broadband connections but the current level is still very low as compared to mobile broadband. If we have to boost the penetration of wired broadband and have to achieve the targets of providing fixed broadband to around 50 percent of the households, it is imperative to fast-track the implementation of measures, such as exemption of wireline revenue from the license fee. This will immediately make broadband more affordable and boost the penetration level.
As a concluding remark, I would say that that NDCP already has all the ingredients which are required for accelerating the pace of digitization, it is just about fast-tracking the implementation and once we are able to do that, I am sure that we will be able to collectively create a very strong foundation for a digitally empowered India.”
The Atamnirbhar initiative and getting 5G technology into the country requires a lot of innovation and local engineering, from chipsets to optical fibre to network elements to wireless systems and software in a holistic manner. Is the current regulatory environment conducive to this?
“The telecom sector for the last 25 years has been working to enable all sectors of the economy to move forward. This time also, the Authority, as well as the government realised this important aspect of innovation through startups. And accordingly reflected that in its various recommendations as well as the in the NTCP 2018.
In addition to this, time is with us, because now the technologies have moved in such a way that we need not club the hardware and software together for enabling the local technologies. If we can have simple software-based solutions, those can be implemented on the off-the-shelf hardware available in the market. And that is how we can become self-reliant. Now whether you call that network function virtualisation or cloud native core networks or open RAN, we have local expertise and skilled manpower to implement all these aspects. As a lot of Indian companies were already working with the OEMs to implement all these aspects for the last few years.
I feel that the Indian system is ready. As far is the policy environment is concerned, we all know that out of the three missions envisaged in NDCP 2018, one mission is totally focused on research and development and innovation and IP creation. And which is the forte of the startups. They focus on one particular problem, identify the solution, and implement those.
It is one of the missions of the policy, Propel India, that is trying to address this particular space itself. Under that space the government encouraging creating R&D fund for entrepreneurs, to enable innovation and cutting-edge communication, 5G software, content, security and many other applications. In addition to that it refers to academic collaborations, permission for pilots, testing, concessions on imported software etc.
To enable the startups to provide these services on their own, the TRAI has started consultations with the stakeholders on how to bring a differential licensing culture framework in India. Separate licences for applications, services, or networks can be given, so that if some startup is interested in providing only applications which can overide the 5G network, then they can take a simple license from the DoT and start providing the applications, which are specific to the problems being faced in different areas of the economy.
The entire framework is already in place, it is a only matter of time that the things will start moving much faster. And in the last few months itself, we have seen that many Indian companies have announced that they are ready to implement the 4G and 5G networks for Indian telcos, through NFV and SDN.”
On the key policy impediments the industry is facing on the road to growth
“The policies are absolutely in place as other speakers have pointed out and the NDCP is a fantastic policy. Now strategies are required to get the execution going. Implementation happens in a rapid manner whether it is right of way or it is other tax burdens in the industry. All these need to be done in a time-bound manner and it is possible to do so because when India moves, it moves very fast and the government moves rapidly. Policies are great. Now is the time for execution.”
Any policy is good if it benefits the common man. What is your experience on enabling that the common man is benefitted?
“If you look at the history of telecom over the last 25 years, there have been great interventions both, by the regulator and the government so that the services reach the common mass. And the very first instance was the NTP 1999, the revenue sharing regime, which was a one good enabler for spread of services.
Subsequently the TRAI intervention on the incoming free calls, mobile number portability, auction of spectrum and subsequently NDCP 2018, a very powerful document for taking the services down to the last denominator and spreading it across the population.
The competition and the forbearance of tariff also resulted in India being lowest-rated in terms of tariffs and also at the same time using the newest technology. We have come a long way. Communication services was provided at one time only by the government, and now it is provided almost solely by private service operators. And this has resulted in a lot of competition and also taking the services to the customers to a large extent.
The Indian telecom operators have gone through a spiral of below-cost pricing for large period and the current tariff levels are one of the lowest in the world and this has led to a significant deterioration of the industry’s financial health.
This also limits the health of the industry and the ability to invest in future. To enable achieve the Digital India vision, it is important that the financial health is addressed immediately and the competitive intensity, while being same, there is definitely a case for re looking at some interventions on TRAI’s part. There is already a consultation on the floor pricing and we believe the TRAI would at the appropriate time will intervene to ensure that the industry remains competitive enough.”
On challenges that are foreseen for 5G implementation and solutions you would recommend
The price of spectrum has been kept very high, and will need to be resolved by the government. A lot has been done already but some investments are still required to be made toward fixed broadband, fiber to the home, inbuilding solutions, and proliferation of Wi-Fi 6. There are so many different angles to this whole puzzle, a lot of things have to come together to go further for this new India, we are hoping for.
From a 5G point of view applications will come up. Once 5G is unleased in India, there will be applications like industry 4.0 and it will be a creative process of leveraging 5G. It has to be in place really fast, there lies the catch.
Developed countries as a thumb rule have invested 1 percent GDP in digital infrastructure. Please comment on the role of the Indian government and industry in creating digital infrastructure.
The role of government policy and initiatives in driving inclusive digital growth in the country can never be undermined. And our government has played a very positive role in enabling that. We have witnessed how the telecom sector and the digital technologies have emerged as a key enabler for economic activity, for remote delivery of services across healthcare, education, banking, agritech etc. We understand the importance of the sector, and going forward from a policy and a regulatory standpoint, we need to create a conducive environment and get a good predictability and certainty, especially with regards to the next generation and the emerging technologies.
In light of evolving technology landscape, building digital trust becomes very important. Aspects like data protection, privacy, national security, all of them are paramount and need to be adequately addressed. But having said that it is also important to understand that these next generation technologies and emerging technologies like IoT, and M2M are still at a very nascent stage in India, and therefore it becomes even more important to adopt a light-touch regulatory regime.
Defining policy too early or having a very tight policy contour will be detrimental for the growth of these new and emerging technologies which are going to be very important for economic activities and they are going to be the key enablers for the growth of the other sectors as well.
What is currently important is to create a balanced framework, which on one hand is able to address the concern around data privacy, security but at the same time it gives ample room for innovation and growth for these services.
Lastly, and most important, as TSPs we are continuously working toward creating and advancing telecom networks in the country, which have become the digital backbone for all sectors, including OTT players. And we will continue to do so in terms of expanding infrastructure. However, we feel that there is a pressing need to bring more parity between the communication OTT providers and TSPs, especially in terms of regulatory requirements around security, traceability, lawful interception, ensuring customer data is not shared outside and secured locally in secured manner. This becomes a very important policy imperative and absolutely essential we have to ensure sovereignty, safety and security of digital communications, which is one of the key endeavours outlined in the NDCP policy.”