The Indian Telecom sector has been riding high on success. The country, second only to China, is inching closer to achieving the billion subscriber feat. The total telephone subscriber base crossed the 688 million mark at the end of July, taking teledensity to 58.17 per cent.
India has emerged the fastest growing telecom market in the world. In fact, its increasing contribution to the Indian economy cannot be ignored. During Indian Telecom 2009 event, Minister of Communications and IT, A Raja recognised telecom as a major driver of the growth of India’s economy and stated that the sector contributed 5.6 per cent to GDP.
In fact, even in the year 2009, which is considered the worst year for telecom growth globally, owing to the recession, Indian telecom sailed through smoothly.
A major contributor in bringing the telecom sector to its present glory has been the Telecom Regulatory Authority of India (TRAI), which was set up in 1997 through TRAI Act 1997 with an aim to “ensure that the interests of consumers are protected, and at the same time to nurture conditions for growth of telecommunications, broadcasting and cable services in a manner and at a pace which will enable India to play a leading role in the emerging global information society.”
How has TRAI fared?Before the establishment of TRAI, the government — DoT — had a monopoly over the telecom sector. DoT not just acted as a regulator, but also as the licensor.
Initial years of TRAI were marred with roadblocks despite which it took a number of initiatives. Since its inception, TRAI has been instrumental in introducing regulations like Unified Access Licensing Regime, Calling Party Pays, abolishing Access Deficit Charge etc.
During its tenure as the regulator of one of the most booming sectors of the economy, most of the industry believes that TRAI has fared well.
Nipendra Mishra, former chairperson, TRAI, says, “TRAI is one of the best regulators in the country and has also received international acclaim.”
RN Prabhakar, former member of TRAI believes, “Within the constraints of TRAI act, the regulator has been very effective. TRAI introduced transparancy in policy matters and issued regulations which helped in bringing down tariffs. Also, TRAI forced operators to introduce two digit VAS activation policy (for eg, using *9 as apposed to * for ringtone activation,) which has significantly reduced the number of VAS related complaints by customers.”
Prabhakar adds, “Interconnection policy introduced by TRAI has also been beneficial for the consumers.”
SC Khanna, secretary general, Association of Unified Telecom Service Providers of India agrees, “TRAI brought in competition in the market. Our entire business model is based on competition. It helped entry of player like Docomo in India, which initiated the tariff war in India.”
Experts believe that over a period of time TRAI has brought more stability and lesser uncertainties in the telecom sector. The regulator might experience some hiccups such as 2G spectrum pricing where its recommendations have been debatable, but overall it is moving in the right direction.Rajan S Mathews, director general, Cellular Operator’s Association of India, says, “I think overall, TRAI has had a good record. The chairpersons have been great and they have initiated some important rulings like unified license, interconnection, revenue share, calling party pay etc. All this has helped to make cellular services affordable.”
He adds, “However, recently there are some issues that have raised concern for the regulator like the 2G spectrum pricing issue. Industry is of the view that their interest in not being taken into consideration. Then, we are waiting for TRAI to make regulations on unsolicited calls.”
While most of the industry in is tune about TRAI’s satisfactory performance, some differ in their point of view.
Anil Prakash, secretary general, ITU-APT Foundation of India, however, is of the view that there are different phases in which TRAI’s performance can be measured.
He says, “Initially TRAI was not effective, later they became effective and now they are totally non effective. They have failed in both their mandates: fixing of tariff and improving quality of service. Because of the tariff war that started, there are so many tariffs in the market, which confuses and frustrates customers.”
He added, ” Under the regime of TRAI, there are 25 prepaid plans offered by a single operator in each circle, and since there are around 10 operators in each circle. It comes to around 250 plans in each circle.”
He adds, “Issues related to quality of service have also been resolved. We still have problems of network congestion and call drops.”
Does TRAI need more powerIndian telecom is maturing in terms of reach, service as well as technology, and with 3G and BWA spectrum allocations over, broadband promises to usher in the next era of evolution.
On the other hand, the road ahead is full of challenges. These include MNP, 2G spectrum pricing, improper subscriber verification, unsolicited calls etc.
The question arises whether TRAI will be able to continue with its current set of powers. Will these be enough to empower TRAI to regulate the expanding telecom market in future?
TRAI has already said that it should be given more powers and has sent a request to DoT regarding the same, to which it is awaiting a reply.
Khanna agrees that the regulator should be given more powers. Citing the example of unsolicited marketing calls, Khanna said, “If we take the example of Do Not Call registry, TRAI doesn’t have the power to prosecute. It cannot punish the violators. To deal with the problem it is necessary that TRAI get power to punish and fine the violators as well.”
Prabhakar agrees, “TRAI should have the power to take disciplinary action against defaulters at least in the areas of quality of service, tariff and interconnection. If we have this power we can at least penalise the operators and then they will be forced to improve their quality.”
However, Jaideep Ghosh, executive director, KPMG, differs. He argues, “Even in other countries regulators role is restricted to regulating and making policies. They don’t have any power to take action against defaulters. It is the work of the ministry, mainly DoT which is authorised to take action against the defaulters.”
He believes that TRAI’s role is and should be restricted to enhancing teledensity and overall performance of the telecom sector.
Agrees Matthews, “The regulator doesn’t need additional powers; The regulatory arm’s right to judge and punish should not be put all together. Earlier DoT was everything wrapped into one and that is why TRAI was formed.”
He adds, “As far as levying of penalties is concerned, there has to be an appropriate forum for that like now we have TDSAT. There are always two sides of any story and both need to be heard before making a judgment. Hence, there should be a separate body for that.”
TDSAT (Telecom Disputes Settlement and Appellate Tribunal) was constituted under TRAI (Amendment) Act 2000, to deal with the issues of consumer grievance and to adjudicate any disputes between a licensor and a licensee, between two or more service providers or between a service provider and a group of consumers.
General opinion in the telecom industry is that both TRAI and TDSAT have been remarkably transparent and open. The websites of TRAI contains discussion papers, recommendations, notifications and orders passed by TRAI. Similarly, the website of TDSAT contains all the judgments passed by TDSAT.
TRAI in its endeavor to improve the telecom scenario in India has tried to create a supportive regulatory environment.
The growth of telecom services in terms of increase in the number of service providers, subscriber base and vast network of the telecom services covering the length and breadth of country are witness to the efforts of TRAI.
These measures undertaken by the regulator have also resulted in overall benefits to the consumer in terms of choice of services and affordable tariff.