Broadbandindia Magazine

Telecom operators have added 17.98 million new users in June, taking the total telephone subscriber base to 671.69 million, the Trai said. This will be mainly because of operators’ growing focus in rural areas and low prices of handsets. Research media Gartner estimates the mobile services revenue to reach $19.8 billion by the end of the year, up 19.7% from 2009. “The arrival of new players in the Indian mobile sector has led to a fierce competition which has sustained the strong subscriber growth we saw in 2009. A majority of these subscribers will be from rural areas,” said Neha Gupta, senior research analyst, Gartner. As per the Telecom Regulatory Authority of India, (Trai), the total subscriber base as on May 31, 2010, stood at 617.53 million with a teledensity of 55.38%. Gartner expects the mobile penetration to touch 55.9% in 2010.

However, this phenomenal growth in the mobile connections will not salvage the fall in revenues. “Expect a dramatic decline in growth of voice revenue from 2010 until the end 2014. While the mobile connections are growing at a CAGR of 11%, voice revenues are experiencing a meager growth of 3%,” she added.  “Increased data adoption will bring some relief to the declining revenues, however, this would not offset the fall,” she explained.

Also the launch of 3G and mobile broadband services later this year, the mobile value added services (VAS) industry is expected to ring in a turnover of Rs 100,000 crore by 2020. According to industry experts, the VAS industry is expected to touch Rs 100,000 crores by 2020 from Rs 15,000 crore now. The mobile marketing companies attending a conference on VAS agreed that the sector will log a higher growth post the launch of 3G and BWA services. Over 2.5 lakh villages would be connected to wireless broadband and 3G by 2012, enabling them to access the whole range of value added services, Telecom Secretary P J Thomas said at the conference. OnMobile Chairman and CEO Arvind Rao said VAS would be a larger industry than advertising or media. “India has a real chance to be the world’s largest VAS innovator due to its 1.2 billion population and its diversity but government has to promote this by providing support like tax benefit,” Rao said.

The telecom sector is likely to experience consolidation over the next 18 months, as the launch of 3G services enables service providers to distinguish themselves on services offered rather just on prices. “The increase in competition in the Indian mobile market has led to price wars, which have, in turn, led to a decline in  voice average revenue per user (ARPU), and we expect this trend to continue as service providers increasingly shift their focus to rural areas,” media person said. Further, the mobile services revenue is expected to exceed $23 billion and India is expected to remain the world’s second largest wireless market after China in terms of mobile connections, Gartner media research said.

Trai mulls new rules-Telecom ministry says not duty bound

The telecom ministry is not duty-bound to follow the industry regulator’s advice on policy issues, the solicitor general has said, fuelling concerns that roles of regulators are increasingly getting diluted under this government. Solicitor general Gopal Subramanium has said the ministry can change the terms and conditions of existing licences and the TRAI recommendations are not binding on the government. The opinion comes after the department of telecommunications sought a legal view following the regulator’s letter that it must be consulted on uniform licence fee.

“Unless the legislature expressly confers on the authority the power to make recommendations for modifications of the terms and conditions of the existing licence,  no such power cannot be presumed or assumed,” Mr Subramanium said in a three-page communication to DoT. “Therefore, I am of the opinion that it is not mandatory for the government to seek recommendations of the authority before the modification of any terms and conditions to the existing licence.” Telecom minister A Raja and the regulator have been sparring over many issues in the past several months that has split the industry down the middle. The differences range from views on mergers & acquisitions, raising spectrum usage charges and the extension of licences of companies. Trai chairman JS Sarma had recommended linking the price of 2G wireless spectrum to 3G prices after bids surpassed expectations.

Mobile phone operators on the GSM technology platform oppose the Trai suggestion on linking 2G to 3G prices, while those operating the Code Division Multiple Access, or CDMA, technology have said it would bring the much-needed level playing field.The solicitor general’s opinion may lead to enormous power with the ministry which faces charges of corruption and accusations of manipulating license process.

The opinion is wrong as it would give draconian powers to bureaucrats and the telecom minister to interpret licensing conditions, while hurting consumer and the industry, said BK Syngal, senior principal at Dua Consulting, and former chairman of state-run Videsh Sanchar Nigam Ltd, now Tata Communications.

Trai is reviewing its two key recommendations — linking the price of 2G wireless spectrum to 3G and plans to take back spectrum in the 900 MHz band and substitute it with 1800 MHz band when licences are renewed — but since these relate to existing licences, DoT will have ultimate powers over these issues as per the legal opinion,” said Mr Syngal.

If the telecom ministry ignores the industry regulator, it may become the second instance in less than a month where the government assumes superregulator rule. The finance ministry recently brushed aside concerns of the Reserve Bank of India that its autonomy may be clipped with a planned bill that creates a panel under the minister with ultimate power to settle disputes between regulators on hybrid products.

But the ministry needs to consult the regulator regarding new technologies and fresh licences, which may be a long way off. “I opined that the central government must seek the recommendation of the authority…as and when a new licence is granted, whether in respect of the same provider, or a new service provider, or a new person, or when a fresh licence is granted with respect of another service,” Mr Subramanium’s reply said.

The government plans to cap the number of telecom companies. Besides, licences for new services like 3G and wireless broadband services have already been issued. Again, new technologies such as 4G are some distance away, thereby sidelining the role of the regulator. This may be a blow to Trai which sought more powers to enforce norms and keep erring operators in check. Its demand included spectrum management, the radio frequencies on which mobile services operate, for transparency

Pesky calls

There seems to be no end to the sufferings of cellphone subscribers. The initiative taken by the government two years back to bring in effective regulations to end unsolicited calls and text messages (SMS) to phone subscribers is yet to yield the desired results, leaving subscribers a frustrated lot. Tele-marketers who make pesky calls and send bulk text messages through telecom operators continue to flout norms as neither the operators nor the watchdog, Telecom Trai, have seriously initiated action against tele-marketers to check the menace which not only intrudes into subscribers’ privacy but also make them pay for these pesky calls and text messages. Operators are in fact paid hefty money by telemarketers to run their services.

The present regulations permit the tele-marketers to make calls to all subscribers who have not registered their number with the National Do-Not-Call (NDNC) Registry for not receiving unsolicited calls or text messages. But currently, subscribers who have registered for the NDNC Registry also get unsolicited calls. When asked, Trai chairman J. S. Sarma said an effective regulation to curb tele-marketers making pesky calls and text messages will soon be put in place.

“The attempt will be made to drastically reduce pesky calls and text messages. You cannot break it altogether but definitely by the end of August, customers will get relief from such unwanted calls reaching them. We cannot allow tele-marketers to continue flouting the norms,” Sarma told. “We are also trying to convince operators for the NDNC. They have not agreed on this (however, state-run operators MTNL and BSNL have no problem). There has been renewed interest from operators on this issue. We are meeting shortly with the industry and this would also be discussed,” Sarma said. If the NDNC is implemented effectively, tele- marketers will be able to make calls and send text messages to only those who opt for it.

Mobile users complain that they keep getting pesky calls and text messages while on roaming, both in India and abroad. “I was in Tokyo and received over 60 SMSes. This cost me over Rs 600. I also kept getting lot many calls from tele-marketers. I picked up the calls only to find that these were mostly from telemarketers. I get such calls despite having registered my number with NDNC,” said Ajay Prakash, a Delhi-based exporter.

When Prakash approached his service operator, the latter expressed its helplessness in the matter. “Why should I pay for any unsolicited bulk message or calls from tele-marketers which I get on my mobile while I am roaming or abroad? Instead the operator should pay for it,” Prakash argued. Although there are provisions to make the tele-marketer pay ‘500 to the service provider for every first unsolicited call and ‘1,000 for subsequent calls, neither the operator nor Trai seem to be doing anything to curb the menace.

Till March 2010, around 27,292 tele-marketers had been registered with the department of telecommunications (DoT), which shows that the intent and commitment on the part of the operators and also large tele-marketing companies to make these pesky calls and send the text messages. The stakes are so high that leading telecom operators like Vodafone, Reliance Communications and Tata Teleservices refused to reply to e-mailed queries sent to them.

Sanjay Kapoor, CEO (India and South Asia), Bharti Airtel, said, “As service providers, all responsible telecom companies are keen that the existing process of NDNC be successfully implemented. The business case for this is too small compared to the customer inconvenience that it brings forth. We take a very strict view on non-compliance – almost 11,000 defaulter users have been disconnected by us.” However, the spokesperson for Idea Cellular claimed it has no dealings with tele-marketers.

Industry expert Pawan Duggal disagrees that tele-marketers will give up making pesky calls to phone subscribers. “The IT Amendment Act 2008 has to be fine-tuned. It does not have provisions to deal with tele-callers. Tele-calling and self regulation cannot go together,” he said.