The Hindu Editorial Analysis- 1 October 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Letting go of a chance to Democratise Telecom Services 

Why in News?

The Ministry of Communications released a draft of the Indian Telecommunication Bill, 2022 for public comments.

The three main legislations that occupy this domain:

• Indian Telegraph Act, 1885
• Indian Wireless Telegraphy Act, 1933
• Telegraph Wires (Unlawful) Possession Act, 1950

What is the draft Indian Telecommunication Bill, 2022?

• Update the extant regulatory framework: The draft is to update the extant regulatory framework in keeping with the advancements and challenges in the sector.
• Repeal legislations: It looks to repeal three legislations and “restructure the legal and regulatory framework” for the telecommunications sector.
• Enabling the government to order suspension of internet power: It has been introduced through the draft Bill.
• Currently, suspension of internet services is ordered under the Temporary Suspension of Telecom Services (Public Emergency and Public Safety) Rules, 2017.
• Primary route for allocation of the spectrum is auction: when spectrum is to be allocated for certain functions of the government such as defense or transportation.
• TSP to exploit its spectrum resource fully: By enabling sharing, trading, leasing, surrendering or returning unutilised spectrum.
• Simplifies: The Bill also simplifies the process for restructuring, merging or demerging.
• Land owned by a public entity: It mandates that land owned by a public entity should be available expeditiously unless there is an express ground of refusal.
• Universal Service Obligation Fund: It allows this fund to be utilized for other purposes such as urban areas connectivity, research etc.

Over-the-top (OTT) communication services:

• It refers to services that provide real time person-to-person telecommunication services.
• Some popular examples include:
  • Messaging platforms like Whatsapp, Telegram, Signal, Messenger, Duo, Google Meet etc.

How does the draft affect over-the-top communication services?

• Telecom Service Providers (TSPs): They provide network infrastructure to OTT’s.
• They allege it will cut their sources of revenue (voice calls, SMS) as they will not have to deal with infrastructure and licensing costs that they have to undertake.
• OTT telecommunication services may be subject to the same licensing conditions as TSPs: The current draft of the Bill expands the definition of “telecommunication services” to include OTT communication services.

Telecommunication Development Fund

• It proposes to rename the Universal Service Obligation Fund (USOF) as Telecommunication Development Fund (TDF).
• The USO fund is generated from the annual revenue of telecom services providers. The sums of money received towards the TDF will first be credited to the Consolidated Fund of India.
• The fund will be utilised to boost connectivity services in underserved rural, remote, and urban areas. It will also aid research and development of new telecommunication services, skill development, and support the introduction of new telecommunication services.

What is the Present status of the Telecom Industry in India?

Present Status:

• The Telecom industry in India is the second largest in the world with a subscriber base of 1.17 billion as of 2022. India has an overall teledensity of 85.11%.
• The industry’s exponential growth over the last few years is primarily driven by affordable tariffs, wider availability, the roll-out of Mobile Number Portability (MNP), expanding 3G and 4G coverage, and evolving consumption patterns of subscribers.
• The Telecom sector is the 3rd largest sector in terms of FDI inflows, contributing 6.44% of total FDI inflow, and contributes directly to 2.2 million employment and indirectly to 1.8 million jobs.
• Between 2014 and 2021, the FDI inflows in the Telecom sector rose by 150% to USD 20.72 billion from USD 8.32 billion during 2002-2014.
• 100% Foreign Direct Investment (FDI) has now been allowed in the Telecom sector under the automatic route.
• India is on its way to becoming the second-largest smartphone market globally by 2025 with around 1 billion installed devices and is expected to have 920 million unique mobile subscribers by 2025 which will include 88 million 5G connections.

Initiatives:

• PLI Schemes under Atmanirbhar Bharat Abhiyan:
  • Production Linked Incentive (PLI) Scheme worth INR 12,195 Crores for manufacturing of telecom and networking products. Incentives worth more than INR 4,000 Crores have been earmarked for the Design Led Manufacturing Scheme of the existing PLI Scheme.

• Telecom Sector Reforms:
  • In 2021, large-scale structural and procedural reforms have been brought in to enhance liquidity and minimise financial stress within the telecom sector.
• Bharat Net Project:
  • Bharat Net Project Optical fibre cables laid to 178,247-gram panchayats, out of which 161,870 are service ready. Additionally, 4,218-gram panchayats have been connected over satellite media, taking the total number of service-ready gram panchayats to 166,088.
• Prime Minister Wi-Fi Access Network Interface (PM-WANI):
  • Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services.

How does the draft Bill impact the position of the TRAI?

• Recommendatory body: Reducing it from a regulatory to a recommendatory body.
• No recommendations for licenses: The government would no longer be required to seek recommendations from the TRAI before issuing licenses.
• Requisition of information: It removes the power of the TRAI to requisition from the government information or documents that are necessary to make such recommendations.
• Reconsideration: Department of Telecommunications (DoT) will no longer be required to refer back to TRAI the recommendations for reconsideration.

Challenges:

• Declining Average Revenue Per User (ARPU): 
  • ARPU decline now is sharp and steady, which, combined with falling profits and in some cases serious losses, is prompting the Indian telecom industry to look at consolidation as the only way to boost revenues.
  • In 2019, the Supreme Court allowed the government’s plea to recover adjusted gross revenue of about Rs 92,000 crore from telcos, that further adds to their stress.
• Limited Spectrum Availability: 
  • Available spectrum is less than 40% as compared to European nations and 50% as compared to China.
• Low Broadband Penetration: 
  • Low broadband penetration in the country is a matter of concern. As per white paper presented on broadband at the last International Telecommunication Union (ITU), broadband penetration in India is only 7%.
  • Over the Top (OTT) applications such as WhatsApp, OLA and so on do not need permission or a pact with a telecommunications company. This hampers the revenue of telecommunication service providers.
  • Huge fluctuations in the duties on Telecom Equipment which contribute to connecting the whole system from the central server to the consumer.

Way Forward

• The telecom sector in India has to deal with various challenges like maintaining a sufficient spectrum and adopting new technologies faster to be able to use the new features and techniques to serve the customers with better and feature-rich service.
• The Draft Telecommunication Bill 2022 addressed these challenges and is open to discussion which would further lead to a comprehensive policy regarding the future of telecommunications in India.