Trai, CCI have complementary role to play, says R S Sharma

Once a telecom market matures, consolidation happens and about 3-4 operators remain. As India is a large market with over 1.2 billion subscribers, 4-6 operators should be able to serve the users' needs, said R S Sharma, chairman of Telecom Regulatory Authority of India (Trai). In an interview with Mansi Taneja, he spoke on how Competition Commission of India (CCI) and Trai have a complementary role to play in deciding issues such as predatory pricing, interconnection usage charges (IUC), high penalties for operators not meeting the benchmark for call drops, among others.

Is Trai satisfied with the current call drops scenario? How has the situation improved on the ground? Are you happy with the steps taken by telecom operators?

Trai has been assessing performance of service providers on call drop parameters based on the average performance in a quarter, against the benchmark of 2%. An analysis of the performance of service providers has shown that the call drop situation, on the whole, has improved. At the same time, although the service providers have been largely complying with the benchmark for call drops, bad performance in many areas is offset by good performance in other areas because of averaging of performance. This has lead to poor customer experience in certain pockets. Further, there has been no compulsion for the TSP (telecom service provider) to invest in infrastructure to improve the service in those areas as it continues to meet the benchmark.

How do you plan to address this issue? Do you plan to penalise operators for breaching prescribed limit for call drops?

Trai has reviewed the network-related quality of service standards for mobile services and has issued the revised norms for call drops. There is also increased penalty for not meeting the benchmarks, which will be in the range of Rs 1-5 lakh with a cap of Rs 10 lakh, depending upon various parameters. It is a graded penalty system depending on the performance of a network. In these revised standards, we have redefined the parameters for assessing call drops. Drop Call Rate (DCR) will be calculated on percentile basis instead of the existing methodology of average of call drops of all BTS (base transceiver stations). It will remove the anomaly associated with averaging of DCR of bad performing cells in the network with good or excellent performing cells. This pragmatic approach for DCR will give better insight into the network performance of service providers and will help to identify local problem areas. As per the revised rules, 90% of base transceiver stations or mobile sites in a telecom circle 90% of time should not fail to handle 98% of the calls, which means not more than 2% calls handled by them should drop. In worst cases or busy hours of the day, not more than 3% of call drops should be registered on 90% of mobile towers in a telecom circle. It also fixed a benchmark for radio-link timeout technology (RLT) – allegedly used by telecom operators for masking call drops.

The debate on interconnection usage charges (IUC) has turned into a battle between two big corporate groups. How do you see this? When will you finalise your recommendations on IUC?

The matter of IUC has always attracted a lot of debate and this is not specific to our country, it happens across the globe. There is always a section of stakeholders who seek higher IUC while the others want lower IUC. Telecom regulators take note of the contrasting viewpoints and attempt to put in place a regulatory regime which is not only appropriate for the growth of the sector in the long run but also is in the interest of the consumers at large. We are reviewing the regime of IUC, which is a periodic review exercise which is undertaken once in 2-3 years. We are also in the process of analysing the matter in a holistic manner. The outcome of this exercise would be an amendment to the IUC regulations, which would be released soon.

Recently, Competition Commission of India (CCI) said that Trai has encroached on its turf while deciding on predatory pricing issues. What are your views on this matter?

We don’t see CCI reference as a turf issue. They have expressed some of their concerns which we will take note of. In fact, both Trai Act and Competition Act are to be applied to the sector in a harmonious way. CCI and Trai have a complementary role to play in deciding these issues and we have no intentions to go beyond the mandate assigned to Trai in the Trai Act. The issues are still under consultation process. We have a specific mandate and CCI has a broad mandate. Both the regulators have to fully honour the legal provisions enacted by the parliament. As per Trai Act, tariff, interconnect and quality of service are the three specific domains where Trai has to necessarily act, keeping in view all related legal provisions. The extant provisions in the Competition Act provide for a dialogue mechanism between the two regulators, where they may refer the matters, which they feel necessary, for obtaining views of the other. The whole spirit is of complementarity or in other words, a relationship between the two entities, such that one enhances the value of the other one.

What are your thoughts on the current state of affairs, specifically the consolidation in the industry?

Till now, Indian telecom market has been served by about 12-14 operators. Consolidation was inevitable. Globally also, once a market matures, consolidation happens and market settles at about 3-4 operators. India being a large market with over 1.2 billion users, 4-6 operators should be able to serve the subscribers' needs. Spectrum trading and spectrum sharing guidelines have also been put in place, paving a way for consolidation in the industry.

Do you think India is ready for 5G technology? Also, do you think the time has come where 2G and 4G will co-exist while 3G will fade away?

Indian telecom market is a matured market. Presently, Indian telecom sector has legacy 2G network as well as 3G and 4G. New technologies are more spectrum-efficient and robust, which ensures that scarce resources like spectrum are efficiently utilised. 5G technology standards are getting finalised in ITU/3GPP (International Telecommunication Union/3rd Generation Partnership Project) and ecosystem is evolving. Certain advanced nations have started setting up 5G networks on a trial basis. A major impetus on 5G will come after World Radio Conference (WRC-19) where the standards and protocols under development will get finalised and then harmonised. Once standards and spectrum bands are finalised, we can expect 5G networks getting deployed in India. Since the technology is evolving in such a way that it can support backward compatibility with the existing technologies, all the technologies will co-exist in at least for few years to come.

When will the consultation paper on spectrum pricing and management for next round of auction be out? Will it also talk about 5G technology?

Trai is in the final stage of preparing the consultation paper which will be issued shortly. In India, spectrum has been liberalised. Therefore, any operator is free to deploy any technology in a given spectrum band subject to availability of technology and desired ecosystem in that frequency band.