Demand for telephones in India saw a rapid increase in the 1990s, and the government was under huge pressure to allow the private sector to invest in the Indian telecoms industry as a part of the country’s ‘liberalisation, privatisation and globalisation’ policies. Thus, private investment in the value added services sector was allowed by the government, and the cellular telecom sector was opened up for competition among private investors. The government announced the National Telecom Policy in 1994 (NTP-94), under the terms of which eight cellular mobile telephone service licences were granted to private operators.
The entry of private operators in the telecoms industry created a need for independent regulation. The Telecom Regulatory Authority of India (TRAI) was therefore established in 1997 to regulate the telecom services of India, including fixation of tariffs for telecom services that were earlier regulated by the central government. Further, in 1998, the government declared the policy for internet service provision by private operators, and the licensing of ISPs began from then. A New Telecom Policy came into existence in 1999 (NTP-99), which emphasised the opening of all segments of the telecoms industry for private sector participation. The NTP-99 strived to create an environment that would enable the continued attraction of investment in the telecoms sector and also enhance the creation of technological infrastructure by leveraging technological development. An addendum was added to the NTP-99 introducing the UAS licence to allow licensees to provide telecom services stipulated therein, covering various geographical areas in India.
The introduction of UAS licences brought some sweeping changes in the telecoms sector over the next decade, along with a controversy-laden dual technology regime, all of which have proved to be game-changers for the telecommunications sector:
- a the Broadband Policy was introduced in 2004, as was an increase in foreign direct investment (FDI) limits from 49 to 74 per cent in 2005, which was further increased to 100 per cent in 2013;
- b renewed 2G licences were issued in 2007;
- c access to 3G/BWA services occurred in 2011;
- d the unified licence (UL) regime was implemented in 2013;
- e access to spectrum for 4G services occurred in 2015;
- f pan-India mobile number portability was implemented in 2015; and
- g spectrum sharing and trading guidelines were issued in 2015.
3G and BWA services hold compelling potential for the internet and a host of other applications, which have been further strengthened by the rollout of 4G services. The combined effect of these regulatory policy regimes led to a sudden spurt in the growth rate of the sector and falling tariffs. Recently, however, growth in this sector has been threatened by limited availability of spectrum, declining rates of return and deterioration in the quality of service.
In January 2011, the Department of Telecommunications (DoT), Ministry of Communications and Information Technology, announced the formation of a committee to revisit the NTP-99 and drafted the New Telecom Policy, which was approved by the Union Cabinet with few amendments as the National Telecom Policy 2012 (NTP-12) in May 2012, finally replacing the NTP-99. The NTP-12 seeks to provide a stable policy regime for about 10 years and focuses on the availability of affordable and effective communications for citizens as well as the convergence of network, services and devices. The DoT, with the approval of the Union Cabinet, implemented the UL regime, which covers all telecom services in India, in keeping with the objective of the NTP-12 and the ‘one nation, one licence’ policy (see Section II.ii).
To understand the true state of the TMT sector in India, the multiple issues that plague the telecoms industry and growth in the country must be recognised. While the constant decrease in average revenue per user worries industry stakeholders post the offers brought in by RelianceJio, consumers on the other hand are frustrated by increased network congestion and call drops, and the attendant quality-of-service issues. Recent changes in technology and regulatory policies, such as liberalised FDI, the UL regime and NTP-12, along with discussions about the issue of OTT players, net neutrality and the Communication Convergence Bill 2001, have brought changes in the industry to the benefit of end-users as well as to the structure of the industry players.
i The principal regulations
The telecommunication and broadcasting sectors are governed by various policies, statutes, rules and regulations broadly coming under the ambit of the following:
- a the Telegraph Act 1885;
- b the Wireless Telegraphy Act 1933;
- c the Prasar Bharti (Broadcasting Corporation of India) Act 1990;
- d the Cable TV Networks (Regulation) Act 1995;
- e the Telecom Regulatory Authority of India Act 1997 (TRAI Act);
- f the NTP-12, which has replaced the NTP-99;
- g the Broadband Policy 2004;
- h the FDI Restrictions;
- i the Information Technology Act 2000 (IT Act) as amended by the Information Technology (Amendment) Act 2008 (along with the Rules thereunder); and
- j the policy guidelines for uplinking and downlinking of television channels.
The Telegraph Act 1885 empowers the government to operate and maintain working telegraph services in India. The DoT is entrusted with the task of granting licences to Indian companies for the provision of various telecoms services. The Ministry of Information and Broadcasting (MIB), along with Prasar Bharti (India’s largest public service broadcaster), is the nodal agency for controlling and issuing guidelines, policies and licences for the broadcasting sector and the electronic media. The Broadcasting Services Regulation Bill 2009 (Broadcasting Bill) proposes forming a broadcasting authority to regulate issues relating to, inter alia, cross-ownership and content regulation for television channels. The TRAI acts as a regulatory body for both the telecom and broadcasting sector and has both regulatory and recommendatory functions. It issues regulations and tariff orders on various subject matters pertaining to the telecommunication and broadcasting sector, and gives recommendations to the government on the allocation of spectrum, guiding terms and conditions of various licences. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) was set up under Section 14 of the TRAI Act by an amendment to the same in 2000 to adjudicate disputes and dispose of appeals with a view to protecting the interests of service providers and consumers of the telecoms sector and to promote and ensure orderly growth of the telecoms sector. The functions of the appellate tribunal are to adjudicate any dispute between a licensor and licensee, between two or more licensees, or between a licensee and a group of consumers, and to hear and dispose of appeals against any decision or order of TRAI. India is a signatory to the WTO Basic Telecommunications Agreement, and has duly met the terms of its agreed obligations, including the opening up of basic voice, cellular mobile and data services, private leased lines and the waiver of customs duties on the telecoms sector.
The IT Act and its Rules provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication.
ii Regulated activities
In terms of the Telegraph Act 1885, the DoT may grant a licence to any Indian company to operate a telegraph subject to certain terms and conditions and in consideration for an appropriate payment.
A telegraph licence enables a licensee to offer licensed communication services by establishing, maintaining or operating telegraph devices such as exchanges, routers, switches and transmitters. Licensed activities include transmission of voice and data over the telecommunications network. The regulatory framework for telegraph licences in India went through a sea change with the introduction of the UL regime, as contemplated by the NTP-12. The erstwhile licensing arrangement was classified by the type of services offered, which was derived from the NTP-99.
Under the recently implemented UL regime, telecoms service providers are entitled to provide all telecom services within the ambit of a single licence, namely the UL. Telecom service providers are required to indicate the services intended to be provided at the time of applying for the UL. The following are the service authorisations available under the UL:
- a UL (all services);
- b access service (service area-wise);
- c internet service (Category A with all-India jurisdiction);
- d internet service (Category B with jurisdiction in a service area);
- e internet service (Category C with jurisdiction in a secondary switching area);
- f national long distance services;
- g international long distance services;
- h global mobile personal communication by satellite services;
- i public mobile radio trunking service services;
- j very small aperture terminal closed-user group services;
- k the Indian National Satellite System mobile satellite system reporting service; and
- l resale of international private leased circuit services.
The UL, in addition to general conditions of the licence and provision of services, also contains certain service authorisation-specific conditions for the licensees of the respective authorisation.
It should be noted that for some categories, like other service providers (including business processing outsourcing units), no licences are issued by the DoT; there is only a requirement for registration as provided under the ‘Revised terms and conditions other service provider category’, 2008, as amended from time to time.
The DoT also endeavours to bring about and update the licensing and regulatory regime notifying various changes to the existing arrangement. One such significant development occurred in 2016, when the DoT (pursuant to the NTP-12) issued guidelines and a licence agreement for virtual network operators (VNOs), discussed in detail in Section VI. The various services regulated or licensed under the broadcasting sector include DTH services, FM radio services, uplinking and downlinking of TV channels, and HITS.
To offer most types of broadcasting service, a broadcasting company must obtain two types of licence: a licence granting permission to offer broadcast services issued by the MIB, and a wireless operating licence from the Wireless Planning and Coordination Authority of the DoT (WPC).
In the case of foreign investment, an applicant company is also required to obtain the requisite approvals or clarification from the Foreign Investment Promotion Board (FIPB). Further, the appointment of foreign nationals to key positions in such companies may require clearance from the Ministry of Home Affairs.
iii Ownership and market access restrictions
The provision of telecommunication services in India is subject to certain restrictions on foreign ownership imposed by the government. Foreign investment (both direct and indirect) in telecommunication services is permitted up to 100 per cent, which was revised up from 74 per cent in August 2013. The enhanced limits have given a boost to foreign participation in telecom companies in India, and the regulatory authorities have witnessed a large number of applications for increased foreign investment. It may be noted that the condition of foreign investment up to 49 per cent being allowed through the automatic route applicable to the previous FDI cap of 74 per cent has been retained for the enhanced cap of 100 per cent, and any investment beyond that is subject to specific government approval. The revised FDI cap is applicable to all telecom services.
Further, foreign investment of up to 100 per cent is allowed for activities such as infrastructure providers providing dark fibre, right of way, duct space and tower (IP Category I), email and voicemail; however, this is subject to the condition that such investors or companies will divest 26 per cent of their equity in favour of the Indian population in five years if these companies are listed in other parts of the world.
Further, FDI is subject to licensing and security requirements as prescribed by the DoT and as laid down in the FDI policy.
iv Transfers of control and assignments
In the terms and conditions of their respective licences, the TRAI and the DoT have taken measures to devise ownership licences that bar a single company or group from controlling more than one licence within a service area. The MIB and the DoT also forbid certain entities from controlling more than one broadcasting service in the same market.
In early 2014, the DoT issued guidelines regulating mergers and acquisitions of telecoms services. The DoT has to be notified for any proposal relating to compromise arrangements and the amalgamation of companies as filed before the National Company Law Tribunal. The provisions for ‘substantial equity’ or ‘cross-holding’ will not be applicable during a period of one year, unless extended by the DoT in writing. The merger of a licence or authorisation will be for the respective service category. Upon a transfer of assets, the licence or authorisation held by such acquired company to the acquiring company, the licence or authorisation of the acquired company will be included in the resultant entity. To offer any additional service or service area, the UL with the concerned authorisation must be obtained. Considering the spectrum cap of 50 per cent in a band for access services, a transfer or merger shall be allowed where the market share for access service in the respective service area of the resultant entity is up to 50 per cent. The spectrum usage charge, prescribed from time to time by the government, shall be payable on the total spectrum holding of the resultant entity. Upon the implementation of the scheme, the total spectrum held by the resultant entity should not exceed 25 per cent of the total spectrum assigned for access services and 50 per cent of the spectrum assigned in a given band in the concerned service area.
With regard to mergers and acquisitions of telecom companies, combinations breaching the thresholds stated under the Competition Act 2002 (amended in 2009) (Competition Act) require notice to be filed with the Competition Commission of India (CCI) within 30 days of board approval or execution of a binding agreement, whichever is earlier. The CCI scrutinises such combinations and forms a prima facie opinion within 30 days of the notice. Where the prima facie opinion is affirmative, the CCI would then order a detailed enquiry into the combination. After the enquiry, the CCI issues its final decision on the combination, which could be to approve the combination, reject it or order certain modifications. Modifications, if acceptable to the parties, would be carried out under the scrutiny of independent agencies, after which a compliance report is submitted to the CCI.
Further, it may be noted that the proposed Broadcasting Bill aims to impose certain cross-ownership regulations on media companies in addition to imposing restrictions on the accumulation of interests to provide for competition and plurality of views. The guidelines for DTH licences state that:
[…] broadcasting companies and/or cable network companies shall not be eligible to collectively own more than 20 per cent of the total equity of applicant company at any time during the licence period. Similarly, the applicant company not to have more than 20 per cent equity share in a broadcasting and/or cable network company.
Further, the UL specifically mentions ownership rules that bar a single company or group from controlling more than one licence within a service area. Under the conditions imposed by the UL on telecom licensees, a promoter or a corporate group is prohibited from owning more than 10 per cent of the equity in more than one service provider within the same service area.
The transfer and assignment of licences is permitted subject to the prior approval of the DoT and the fulfilment of certain conditions prescribed by the UL. One significant condition is that the transfer or assignment should not reduce the level of competition in the service area.
III TELECOMMUNICATIONS AND INTERNET ACCESS
i Internet and internet protocol regulation
Internet and internet-based services are now an integral part of the telecommunications sector.
The internet was first introduced to India in 1990 through the Education and Research Network (ERNET) Project funded by the United Nations Development Programme. It was implemented by the Department of Electronics in partnership with various research and technical institutions. However, in the mid-1990s, the external funding of the ERNET ceased, after which the government proposed the NTP-94. In November 1998, the government opened up the sector for providing internet services by private operators (ISPs). A liberal licensing regime was put in place with a view to increasing internet penetration across the country. The NTP-99 envisaged the opening up of internet telephony whereupon the government decided to permit ISPs to process and carry voice signals (restricted internet telephony) with effect from 1 April 2002.
Pursuant to the NTP-99, the DoT announced guidelines that initially only permitted ISPs to process and carry voice signals. Further, with the introduction of new ISP licences in 2008, ISP licence holders were allowed to provide various IP-based services, including IPTV. There are no specific separate guidelines for IP-based services, except that IPTV services are also required to follow MIB guidelines. As per UL guidelines, the authorisation for provision of internet services is granted under the UL. The applicant company has to apply for a UL with authorisation for internet services.
ii Universal service
The DoT has created a USO fund to be used exclusively for meeting the USO by providing access to telegraph services (which may include internet, internet telephony, VoIP and other new technology services) to people in rural and remote areas at affordable and reasonable prices.
The USO fund was primarily established to provide access to only ‘basic’ telegraphic services, but provision was subsequently made in the Indian Telegraph (Amendment) Act 2006 to include all types of telegraphic service. The Telegraph Rules 1951 were subsequently amended to enable support for mobile services and broadband connectivity in rural and remote areas of the country. The Telegraph Rules also provide subsidy support to eligible operators for operational sustainability of rural wireline household direct exchange lines. In furtherance of the foregoing, in 2009, BSNL, India’s state-owned telecoms provider, also launched a new scheme to promote broadband in rural areas.
iii Restrictions on the provision of service
The TRAI is empowered to monitor and regulate charges (including interconnection usage charges and termination charges) and other terms of service. As appropriate, the TRAI issues directions or notifications to regulate charges and terms of service.
The TRAI has mandated open access to all the network operators, and any disputes therein may be addressed before the TDSAT. Further, the delivery of online content through IPTV is required to conform to the Programme and Advertisement Code.
Furthermore, telecoms licensees providing TV channels are required to broadcast such channels in exactly the form as are registered with or otherwise allowed by the MIB. However, in such cases, the responsibility of ensuring that content is in accordance with the laws, rules and regulations will be with the broadcaster, and the telecoms licensee will not be held responsible. Carrying any broadcast satellite TV channels that are either permanently or temporarily prohibited or that are not registered with the MIB is also not permitted. Guided by the recommendations of the TRAI and MIB notifications of January 2014, Broadcast Audience Research Council (BARC) India brings together the three key stakeholders in television audience measurement – broadcasters, advertisers, and advertising and media agencies – via their apex bodies. BARC India seeks to establish a robust, transparent and accountable governance framework for providing the data points required to plan media spends more effectively.
Network operators are only required to monitor and block transmission of content that may be objectionable, obscene or unauthorised pursuant to the requirements of licensing terms, the IT Act and other applicable regulations.
Any voice services, data and images transmitted through telecommunication, broadcasting and cable services are subject to restrictions under several central and state laws, rules and regulations. The Indian Constitution empowers the government to impose reasonable restrictions on free speech and expression in the interests of India’s sovereignty and integrity, state security, friendly relations with foreign states, public order, decency, morality, contempt of court, defamation and incitement to an offence. The Indian Penal Code applies, inter alia, to all types of expressive media, whether written, spoken or in the form of images.
Further, under the provisions of the Cable TV Networks Act, cable operators are prohibited from transmitting programmes that do not comply with the Cable Programme Code (under the Cable Networks Rules), which lists various programmes that ought not to be broadcast on a cable network in the interest of national security and public order.
Finally, the government may impose restrictions on the grounds of national security on internet content and websites under the IT Act and under applicable ISP licences. The IT Act provides for the protection of personal data and contains penal provisions if such data are misused by or due to negligence of a service provider, operator or company. Further, any unauthorised access to customer data or information and any misuse of such information are strictly dealt with under the IT Act and the penal law of India.
Telecoms operators are required to maintain call records for their subscribers for a certain period, and are prohibited from sharing customer details with any third party for any purposes other than billing. TRAI recently issued a consultation paper (in August 2017) on privacy, security and ownership of data in the telecom sector to protect the interests of telecom subscribers along with the rights and responsibilities of data controllers. The paper discusses how the government or its authorised authority can set up a technology solution that can assist it in monitoring the ecosystem for compliance. Given the fears related to abuse of these data, the government wants to create technology-enabled architecture to audit the use of personal data, and associated consent. In the recent Supreme Court judgment in a landmark case considering the right to privacy, the Court held that the right to privacy is a fundamental right guaranteed under the Constitution. Hence, this will further increase the liabilities of data controllers regarding how they collect and use data; therefore, it will be interesting to witness the changing technological landscape within which this right will play out.
The IT Act provides for punishment for the publication or transmission of material depicting child pornography or children in sexually explicit acts.
In addition to the foregoing, the federal government exercises its discretion to block websites if they are found in violation of the IT Act and Rules, public policy, national security, public peace and sentiments.
IV SPECTRUM POLICY
The laws governing spectrum policy are the Telegraph Act 1885 and the Indian Wireless Telegraphy Act 1933, combined with various rules and regulations. These statutes empower the government or the DoT to grant licences to service providers for carrying out public telephony services under certain terms and conditions. The WPC is the national radio regulatory authority responsible for frequency management, including licensing, and caters to the needs of all wireless users in the country. It exercises statutory governmental functions, issues licences to establish, maintain and operate wireless stations, and is responsible for formulating and maintaining the national frequency allocation plan.
In terms of the existing policy, spectrum allocation is linked with the granting of a licence by the DoT. However, as previously mentioned, the TRAI has recommended the delinking of spectrum and access service licences, doing away with subscriber-based criteria for spectrum allocation and linking rural rollout with fresh spectrum allocation. It is expected that a thorough review of the latest recommendations will provide a further boost to the telecoms and media sector in India.
In August 2015, the government issued guidelines on spectrum sharing, allowing telecom companies to share airwaves in the same band to enable improved spectral efficiency and quality of service. However, the government has not allowed the leasing of spectrum. The basic objective of spectrum sharing is to provide an opportunity for telecom operators to pool their spectrum holdings and thereby improve spectral efficiency. Sharing can also provide additional network capacities in places where there is network congestion due to a spectrum crunch.
Traditionally, telecoms operators have been allowed to own and share only passive infrastructure like mobile towers but not active infrastructure such as spectrum. However, bearing in mind that some infrastructure provider Category 1 (IP-1) companies have invested in the creation of active network infrastructure, last November all IP-1 providers were provided an opportunity by the DoT to take either a UL or VNO licence or requisite authorisation, or a UL or VNO Category B licence for a specific geographical area, and move all operations involving active network elements under the licence. Alternatively, IP-1 providers could transfer all active network elements to a holder of valid licence under Section 4 of the Telegraph Act, 1885.
ii Flexible spectrum use
The WPC was responsible for the allocation and assignment of spectrum in India after the delinking of spectrum, which introduced considerable change to the spectrum-allocation methodology.
Various telecom regulatory bodies such as the International Telecom Union, the Office of Communications (UK) and the US Federal Communications Commission have recognised that the optimal use of radio spectrum is dependent on flexible spectrum management policies and the multi-time sharing of this precious resource. Recently, the relevance of unlicensed spectrum is also being recognised by policymakers in India. This is evident from the NTP-12, as well as from recent remarks made by senior government officials on the subject. Moreover, the NTP-12 made it an objective to de-licence additional frequency bands for public use. It is further specified that the government will identify additional frequency bands periodically to exempt them from licensing requirements for the operation of low-power devices for public use.
Currently, many industry bodies and advocacy groups in India have made specific requests for unlicensed spectrum bands, including 433–434MHz, more bands in the sub-1GHz range, and more slots in the 2.4GHz, 1,880–1,900MHz, 5.15–5.35GHz, and 5.725–5.825GHz bands.
iii Broadband and next-generation mobile spectrum use
The trading and resale of spectrum is not allowed in India. The DoT may ask for the return or surrender of unutilised spectrum or a shift to another spectrum after surrendering the previously allocated spectrum. Due to their rapid and continuous growth, low spectrum allocation and interconnection problems, Indian cellular networks are facing traffic congestion problems, especially in the metropolitan areas.
To serve the growing demand for mobile data services, another round of auctions for various frequencies was announced by the DoT issuing a notice inviting applications (NIA) dated 8 August 2016. Spectrum sharing is permitted through the guidelines dated 24 September 2015, as amended from time to time. Further, telecom operators will be allowed to share spectrum in a particular band only after one year from the date of the ‘frequency assignment’ in that band acquired through such auction. Other terms and conditions of sharing guidelines shall also remain applicable. Spectrum trading is permitted pursuant to guidelines dated 12 October 2015, as amended from time to time. The terms and conditions attached to the spectrum under the provisions specified in the relevant NIA document or otherwise shall continue to apply after the transfer of spectrum unless specifically mentioned in the guidelines. For instance, the spectrum cap of 50 per cent in a band for access services under the DoT transfer and merger guidelines will remain applicable.
In a recent consultation paper, the telecom regulator has sought views on the timing, pricing and quantum of spectrum to be sold in the next round of auctions, which could see 5G airwaves promising blistering download speeds making a debut. The spectrum sale could put on the table 60 per cent of unsold airwaves from last year’s auctions and some 275 units of new spectrum in bands identified for 5G services.
Telecom operators are yet to achieve full-scale 4G networks, and are still in the process of deploying networks that are focused on urban and semi-urban areas, alongside expanding their 3G footprint in the country. The financially stressed industry is in no mood to pitch for bandwidth before 2019. The regulators also believe that the regulatory and technical standards for 5G are globally still in the process of deliberation and consultation, thus making 2019 a more appropriate time to auction 5G.
iv Spectrum auctions
The DoT has brought about some reforms in the spectrum allocation policies of India, in line with a judgment of the Supreme Court mandating the allocation of natural resources through an auction process.
The DoT has allocated spectrum through such auction process. Licensees were required to pay a non-refundable entry fee, and from then on an annual fee throughout the term of the licence that generally varies between 6 and 10 per cent of the adjusted gross revenue. As previously mentioned, the NTP 2012 has been approved by the government, and the DoT has been asked to draft a detailed policy on the basis of guidelines provided under the NTP 2012.
The government has recently liberalised the payment terms for spectrum auctions by allowing two options for payments to telecom companies to acquire the right to use spectrum: upfront payments and payments in instalments.
i Restrictions on the provision of service
Network operators are licensed by the DoT and regulated under the Telegraph Act, whereas content providers are required to follow guidelines issued by the MIB.
Operators are obliged to transmit channels operated by or on behalf of Parliament in the manner and name as may be notified by the federal government, and at least two terrestrial channels (operated by Prasar Bharati subsidiary Doordarshan) and one regional language channel of a state in the prime band, in satellite mode on frequencies other than those carrying terrestrial frequencies.
The guidelines for downlinking of television channels issued by the MIB regulate the broadcasting of foreign channels in India. The guidelines do not specify requirements for local content, but the MIB prescribes the must-carry obligations for the broadcaster. Further, a company permitted to downlink registered channels must comply with the Programme and Advertising Code prescribed under the Cable Television Networks (Regulation) Act 1995, and is required to adhere to any other code, standards, guidelines or restrictions that may be prescribed by the MIB for the regulation of content on TV channels from time to time. Content restrictions are also imposed through licensing terms and conditions.
Content that, inter alia, offends against morality or decency, promotes superstition, is defamatory, denigrates India’s sovereignty and integrity, affects national security or is in contempt of court is restricted from being broadcast through any service.
In addition to the above, the MIB issues advisories and guidelines requiring TV channels to not telecast and carry coverage of certain events and activities, such as the live coverage of terror attacks.
Advertisements on cable and radio are regulated under the Cable Advertisement Code and All India Radio’s Advertising Code (under Phase II FM Policy) respectively.
With regard to FM radio services, the government, in consultation with the TRAI, notified the migration of the existing Phase II FM radio licensees to Phase III in February 2015. Subsequently, the government initiated the process to rollout Phase III, and conducted auctions for the allocation of Phase III channels in July and August 2015.
ii Internet-delivered video content
The economics of video distribution have changed drastically with the use of the internet for video distribution. The move from broadcasting video distribution has affected the broadcasting industry, and the MIB has brought out new guidelines to regulate this.
The MIB has issued guidelines for the provision of IPTV services. According to these guidelines, cable operators, while providing IPTV services, will continue to be governed by the provisions of the Cable Television Networks (Regulation) Act 1995 (Cable Act), the TRAI Act and any other laws as applicable, and as such will be able to provide such content on their IPTV service as is permissible under the Cable Act, and that is in conformity with the Programme and Advertisements Code prescribed thereunder. Further, it provides that if a telecoms licensee provides a television channel through IPTV, such channel should be transmitted in the same form as it is registered with or permitted by the MIB, and it shall be the responsibility of broadcasters to ensure that the content is in accordance with the extant laws, rules and regulations. Carrying any broadcast satellite television channels that are either permanently or temporarily prohibited or not registered with the MIB is not permitted.
VI THE YEAR IN REVIEW
The NTP-12 is in the process of being implemented, and some suggested policy measures have already been implemented. In keeping with the objectives of the NTP-12, the telecommunications sector has already witnessed a sea change in the regulatory regime with the implementation of the UL regime.
To transform the entire ecosystem of public services through the use of information technology, the government has launched the Digital India programme with the vision of transforming India into a digitally empowered society and knowledge economy.
Digital India is an ambitious programme projected at approximately US$17 billion. This programme aims to prepare India for the knowledge-based transformation and deliver good governance to citizens through synchronised and coordinated engagement with both the central and state governments.
The programme was envisaged by the Department of Electronics and Information Technology, and existing and ongoing e-governance initiatives will be revamped to align them with the principles of Digital India. The programme will be implemented in phases from 2014 until 2018. Digital infrastructure will focus on providing high-speed secure internet.
The government approved the National Optical Fibre Network project (NOFN), now called BharatNet, to connect all 250,000 gram panchayats2 in the country. Non-discriminatory access to the network will be provided to all telecom service providers, such as mobile, internet and cable TV providers, in rural areas. The project is being executed by a special purpose vehicle, Bharat Broadband Networks Limited.
The DoT has mandated that preference be given to domestically manufactured telecom products through a procurement process. The DoT auctioned spectrum during the year that, together with the spectrum already issued, could be issued to provide 4G services more effectively.
The TRAI has issued a consultation paper on OTT services and regulations on net neutrality, triggering a country-wide debate that led to it receiving more than a million responses from stakeholders, industry associations and internet users. Further, the DoT has issued guidelines and a licence agreement for the introduction of a UL for VNOs, which could offer consumers more choices for voice and data services while affording telecom operators more options to monetise their unused airwaves. VNOs are retailers of telecom services who buy bulk minutes from telecom operators and sell them under a different brand. As such, a VNO will be an entity providing telecom services such as mobile landlines and internet, but only as a retailer for fully fledged telecom operators such as BSNL and Mahanagar Telephone Nigam Limited.
The DoT has amended the UL for telecom operations, which will allow the sharing of active telecom infrastructure such as antenna, feeder cable and transmission systems between operators, thereby lowering the costs of operations and leading to the faster rollout of networks.
Pursuant to the liberalisation of the FDI limit in the telecommunications sector, where the FDI cap has been increased to 100 per cent, a large number of foreign telecom service providers have initiated the process of raising foreign participation and obtaining full ownership and complete control over their Indian entities. It should be noted that investment beyond 49 per cent will require the approval of the FIPB. This move towards liberalisation is expected to leverage funds into the telecoms sector. Demonetisation saw a digital push resulting in the increased adoption of mobile wallets, putting the market on a turbo charge. To bridge the affordability gap for those people residing in rural areas, and to support government efforts towards a cashless economy by incentivising digital means, the TRAI has recommended a scheme under which 100MB of data per month may be made available to rural subscribers for free. In addition to this, the TRAI has released a consultation paper that aims to offer consumers free internet services within the net neutrality framework, and has proposed three models for free data delivery to customers without violating the regulations.
The has also directed all service providers to deliver broadband services in a transparent manner by providing adequate information to broadband consumers. In an effort to give more to customers, the TRAI has directed telecom companies and mobile operators to compensate consumers in the event of dropped calls with a view to reduce the increasing number of dropped calls. The TRAI has also discussed the need for an independent and appropriately empowered structure to be created for the resolution of grievances of telecom consumers.
VII CONCLUSIONS AND OUTLOOK
India is in the process of implementing various provisions of the NTP-12, such as:
- a ‘broadband for all’ with a minimum download speed of 2Mb/s;
- b convergence of network, services and devices;
- c effective and efficient management of spectrum, leading to a reduction in call drops;
- d VoIP; and
- e cloud computing and next-generation network.
With its diverse provisions, the NTP-12 is intended to benefit consumers as well as industry players providing telecommunications services.
India witnessed a large-scale movement and debate in relation to net neutrality and OTT in the past three years (2015, 2016 and 2017). The steps the government will take to bring the debate to an end and resolve the issue of net neutrality and OTT remain to be seen.
The DoT’s agenda for the sector includes:
- a another round of spectrum auction in a number of bands in 2017;
- b the implementation of the NOFN, which will resolve the issue of call drops through an efficient use of spectrum by industry players;
- c helping VNOs to set up shop in India; and
- d establishing a government user network.
As per a Microsoft report, India will emerge as a leading player in the virtual world by having 700 million internet users of the 4.7 billion global users by 2025. With the government’s favourable regulation policies and 4G services already in the market, the Indian telecommunication sector is expected to witness fast growth in the next few years.
The Department of Telecommunications (DoT), through its letter dated 19 April 2017 to TRAI seeking recommendations on the same, informed that the government is planning to auction the right to use of spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz, 2500MHz, 3300-3400MHz and 3400-3600MHz bands in the next auction be held in 2017. The right to use of spectrum in these bands is intended to promote initiatives like the internet of things, machine-to-machine communications, instant high definition video transfer as well as its Smart Cities initiative. The Indian telecom network is the second-largest in the world after China in terms of the number of telephone connections. The Indian telecoms industry is considered to be a vital tool for the development of the country as a whole by contributing towards the immense growth, quick expansion and upgrade of various sectors of the nation.
TRAI had sent its recommendations on the valuation and reserve price of spectrum in the 700MHz, 800MHz, 900MHz, 1800MHz, 2100MHz, 2300MHz and 2500MHz bands on 27 January 2016, and subsequently, on the back of a reference from DoT, the Authority sent its recommendations on 18 April 2016. A spectrum auction was held in October 2016 in which about 60 per cent of total spectrum remained unsold. In the referenced letter dated 19 April 2017, the DoT has proposed auctioning spectrum in these bands again. In addition, the DoT has included two more bands: 3300-3400MHz and 3400-3600MHz.