TRAI recommends district-level telecom operators in new unified license

Overruling objections by big telecom operators, the Telecom Regulatory Authority of India (TRAI) has recommended allowing district-level operators.

Anyone, including local cable operators, will now be able to offer landline and mobile, Internet and other services after paying the Rs 10 lakh entry fee per district, if the recommendations are accepted by the Government.

In addition, there will also be a national-level license, saving operators the trouble of applying for a license in every state.

Taking a different approach to the wireless-is-everything thinking, the Indian telecom regulator TRAI also pushed for strong roll-out and incentives for fibre optic networks in the country.

It also wants the government to allow people to make calls from their computers to phones through VoIP — services such as Skype and Google Voice (Gmail.)

In its recommendations on how to merge existing licenses and create a “Unified Licence” encompassing Internet, mobile, landline and media distribution, the TRAI dismissed the opposition of big operators to the entry of small, district-level operators.

It pointed out that district-level operators, either independent or virtual (MVNO) is possible in today’s atmosphere.

“Studies have shown that nearly 70% of the outgoing traffic from rural areas is meant for a destination within the district. Of this only 20% traffic goes to another district and hardly 10% to another State. International calls represent less than 1% of the traffic,” it pointed out.

“Such licences will spur local initiatives in creation of broadband infrastructure and introduction of innovative services. There is a possibility of smaller players like cable operators and infrastructure providers coming in. This would lead to larger infrastructure creation and
introduction of newer technologies in the network,” it said.

“All these would translate into higher broadband penetration, greater contribution of telecom to Indian economy, fair and equitable access to the triple-play [voice-data-media] network within communities at district level and more affordable services to the customers.

“It is expected that with the inception of a district level licence, we would see country wide availability of a wide range of services within the next 2-3 years,” it added.

TRAI pointed out that the existence of large number of state-level operators has not led to much improvement in the penetration of services, especially broadband and landline, in India’s rural heartland.

It pointed out that state-level operators focus only on district headquarters, especially in broadband, and tend to leave the other areas out.

“A national or a circle level operator would have a dispersed focus and cannot plan with same intensity for each and every district. The overall objective of planning and allocation of resources for such an operator would be to optimize on a national or circle basis as the case may be.

“A district level licensee, on the other hand, could focus on spreading services all over the district and would be able to do so in much lower outlay as compared to what national/circle level operators would do for their service areas.

“A district level operator can also focus well on the requirement of the ‘local’ population taking care of local tastes, preferences, culture and language options,” it added.

“The existing roll out obligations were very lenient and urban centric. The service providers were mandated to provide coverage only in the district headquarters or major towns as a result of which, even 15 years after the introduction of mobile service in the country, the rural teledensity was low…

“most of the broadband proliferation is taking place in the urban areas with only about 5% of the total broadband connections being in rural areas,” it added.

It also dismissed the argument that wireless broadband, such as 4G TD-LTE and Wimax, will be able to fulfill the demand for high-speed Internet.

“Provision of broadband through wireless has limitations. The bandwidth offered by prevalent wireless technologies is shared among the users active in a cell, making it difficult to offer high bandwidth required by many applications in rural and urban areas.

“.. in rural areas applications like e-health, tele-education other services would require bandwidth in the range of 3-4 Mbps.

“In urban areas applications like video streaming, HDTV and 3G gaming would push up the requirement to 8 Mbps or more in future.

“In such a scenario wireless broadband cannot be the sole means of broadband proliferation in rural and urban areas. In addition, increasing broadband traffic will give rise to greater requirement of scarce spectrum.

“According to a study about 70% of wireless traffic is generated indoors resulting in wasteful use of spectrum. The choice therefore shifts to optical fiber and cable as important media
for proliferation of broadband.

“Optical fibre networks being cost effective, resilient, robust, supporting low latency and easily upgradable are being perceived as long term solution to support enormous bandwidth requirement in the core, aggregation and access networks.

The Government is already setting up a National Broadband Network, which will be an open
access optical fibre network extending upto the villages. TRAI pointed out that district-level operators, including cable TV providers, will be able to tap into this fibre network and extend it to the local population for very high speed Internet.

It recommended a an entry fee of Rs. One crore for the state level, 15 crore for national level and Rs. 10 lakh for the district.

Currently, operators have to pay Rs 200 crore for the state-level license, the only one in existence.

It also said that Internet users in India should be allowed to call phones directly from their computers if they so wish, as is possible in most parts of the world.

“Accordingly, Internet telephony has been included in the scope of the Unified Licence,” the TRAI said.