Policy Encroachment: Is TRAI favoring Reliance JIO?

Reliance JIO which is a green field 4G services operator is in the phase of testing its services in various parts of the country. The operator is estimated to have more than 1.5 million subscribers on its network, even though the services are not officially launched on full scale.

COAI’s recent communication points finger directly towards Reliance JIO getting support from TRAI – India’s telecom watchdog.

COAI, the industry body representing India’s telecom operators says that while DoT is taking progressive initiatives to support the growth of the industry, some of the recent consultation papers by TRAI appear to be biased and aimed at hurting the existing operators.

“An inconsistent policy framework will hurt investments and may even impact the rollout of networks, especially in rural areas. COAI is calling for a balanced, transparent and unbiased regulatory regime.” COAI said.

The Cellular Operators Association of India (COAI) also expressed deep concern over some of the recent consultation papers introduced by the Telecom Regulatory Authority of India (TRAI). It said that these, seen along with other recent TRAI decisions, point to a pattern of discrimination against the existing mobile operators.

COAI added it is shocked that some of the papers seem to have been crafted and timed to serve the interests of new players such as Reliance JIO, with complete disregard for the massive investments made by the existing operators. While COAI appreciates that TRAI would welcome new entrants to the sector, this must not extend to adapting policy measures to either promote or discriminate between existing and new players.

COAI said that over the years, TRAI along with the Department of Telecommunications (DoT) has played a stellar role in formulating a progressive regulatory environment that has enabled the growth of telecom services in India and empowered a billion Indians with the benefits of telephony.

In particular, some of the recent initiatives by DoT, such as harmonization of spectrum, merger and spectrum trading guidelines and efforts to provide government buildings for putting up sites have been supportive of the Industry challenges, while the operators on their part remain fully committed to the government’s Digital India vision.

However, some of the recent decisions and policy consultations undertaken by TRAI have left the Industry worried, as these appear to be distorting the level-playing field within the sector and are regressive in nature.

Said Rajan S Mathews, Director General, COAI, “A clear, stable and predictable policy environment is the cornerstone of any ‎regulatory regime that fosters industry growth and customer services. Over the past few months, the industry has seen an unprecedented deluge of discussion papers from TRAI. Some of the consultation papers appear to be heavily loaded in favor of new players and point towards a bias against the existing operators. We hope that TRAI will take a more balanced view on issues impacting the entire industry and ensure a level-playing field.”

Some of the issues highlighted by the Industry:

Mobile Termination Charge was first introduced in 2003, and is acknowledged by TRAI and DoT as the single-most determinant factor of rural rollouts over the years. It was reviewed thereafter in 2009 and 2015. The present Interconnect regime was implemented by TRAI in March 2015 and it was clearly stated by TRAI itself in 2015 that the next review would take place in 2017-18.

It is, therefore, surprising to see the urgency displayed by TRAI in this matter, with the consultation process initiated at such an early date and despite the fact that the matter is sub-judice in various courts of law. It appears that the exercise is aimed at hurting the financial and operational viability of existing operators.

In another consultation paper, TRAI has sought to regulate the charges for termination of Internet Telephony calls without even finalising the routing and numbering framework. TRAI is trying to regulate the price of a service, which is niche and largely unknown.

COAI says that the industry is unable to comprehend this urgency when contrasted with the fact that TRAI itself has chosen not to regulate the prices of other niche services such as HD channels, Toll Free Services, International Calling Cards etc, which either continue to be on forbearance for several years till they mature, or have failed to take off.

Further, the call drop regulation, which has been finally set aside by the Hon’ble Supreme Court, far from working to address the quality issue, was a draconian measure built to financially penalize and foster perceptions, which discredit existing mobile operators in order to perhaps favour new players with empty data networks.

According to COAI, the bias is also evident from the fact that TRAI in an unprecedented move reduced the block size of 2300 MHz band spectrum from 20 MHz to 10 MHz, only to accommodate existing BWA holders who would have otherwise crossed the band specific cap beyond 30 MHz.

The industry believes such an increasing disenfranchisement of existing operators through these regulatory decisions, bodes ill for investments, industry growth, and customer services and upsets the well established level-playing field paradigm – the cornerstone for maintaining a healthy and thriving competitive structure.

The industry is also of the view that such an inconsistent policy framework will hurt investor sentiment. This may further impact the rollout of networks, especially in rural areas, which would not be in the long-term interest of consumers.

COAI is urging the Government and TRAI to address and resolve its concerns on an urgent basis.

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