The telecom sector is facing one of its most challenging periods with operators staring at big debts and spectrum-related uncertainty. One year into the job, Rahul Khullar, Chairman, Telecom Regulatory Authority of India, has dealt with some vexed problems facing the industry.
But he now has to deal with new issues such as the allegations by the Comptroller & Auditor General on quality of service norms and cross-holding rules for media. Business Line spoke to Khullar on a range of issues. Excerpts:
There have been questions on TRAI’s Quality of Services (QoS) norms. Is there a problem?
TRAI has laid out technical standards for ensuring QoS. These standards cover things like which is the worst-affected base station, what is the down time, what is the call drop rate, which are the worst affected areas, do consumers have access to call centres … However, it is not feasible for the regulator to go around on its own and measure these variables. So we have to hire someone for which we have an open tender for selecting agencies whose job is to do the test drives and report back to us. We analyse this data.
We know that the most general complaint is around call centre accessibility; there’s also a problem with the time taken to address consumer complaints.
TRAI has told the telecom companies to be more sensitive to this issue because consumers will simply not accept poor service any more.
But how do you deal with telcos that violate the regulations?
We have started to impose financial penalties on operators. We have issued a regulation to this effect, incorporating financial disincentives.
What has been your latest action against unsolicited commercial calls and SMS?
We have put in place a regulation under which anyone sending unwanted commercial messages will be disconnected on the first complaint itself. Not only that, we have asked the telecom companies not to give a connection to that individual or entity for two years. The message we want to send is, if you want to do legitimate business then get yourself registered as a telemarketer and follow the regulations.
From the consumer perspective, would not it be better to give a part of the penalty collected from the telcos for such unwanted messages?
We have done away with the penalty. Now it’s straight disconnection of telephone. Also, our legal experts advised us that we will not be able to give the users any monetary compensation from the penalty collected. But we have greatly simplified the process for lodging a complaint.
The TRAI regulation on unsolicited value-added services has not been implemented by telecom firms for over 18 months. What’s the action on this front?
This issue has also been dealt with firmly. We are framing a new regulation under which telecom companies will have to take users’ consent before subscribing to any VAS. Second, once you have entered a service then you must have an exit provision. The second part has already been installed, but the first requires a technical solution that can be complex. The telecom companies will have to deploy a software-based system housed within the telecom provider’s premise which will be subject to audit by the TRAI.
How are you going to implement free national roaming? Will it be done through a special tariff voucher (STV)?
We went through a consultation on this issue and many options are being considered about including an STV. An STV will allow a roamer to self-select. Buying an STV separates him from the rest of the users. This helps in making sure there is no cross-subsidy. But this is only one of many ideas. We will announce our final decisions soon.
What’s the need for a regulation on media cross-holding?
The questions one has to ask is are you doing a media job or are you projecting corporate interests while passing yourself off as media. I recently asked one reporter at a pink paper as to where a particular story came from and he said that they are told what to write. I ask them when will you tell our side of the story and the response I got was that they can’t. Editorials are paid for and articles are mandated or dictated.
In the TV space, I get to hear how one person (channel) is close to one corporate camp and another (channel) to a rival camp. Do you think this is a good thing for India? I am all for the freedom of the press. But this is not freedom. Media is being manipulated to project corporate interest. I am open to a debate and discussion but I can’t not do anything about it. By August, we should be ready with our recommendations.
How are you dealing with spectrum issues?
The main issue is about pricing of 900 MHz and 1800 MHz. That is up to the Government to take a decision. At TRAI, we have on our own started looking at how to make available more spectrum. For example, we are looking at how to free up spectrum now used by Doordarshan and other users.
Sam Pitroda has also pushed for this, and use of ‘white space’
There are conceptual differences on what constitutes white space. The problem is that the more one starts using ‘white space’ more the chance of interference. A different issue altogether is vacating idle spectrum held by a Government agency.
There have been demands to release more 3G spectrum in 2.1 Ghz band? Is TRAI looking into this?
The industry came and said that if the 3G intra-circle roaming issue cannot be resolved why doesn’t the Government release more 3G spectrum? Intra-circle roaming happened because none of the operators have enough spectrum across the country. So they said there are frequencies available in 2.1 Ghz band and if the Government does a clean swap with Defence you will get enough for 2-3 more players. Defence will also not be worse off as it will get swap in another frequency band. But this cannot be done by the regulator. It’s the licensor and Defence Ministry which has to discuss this.
Is the worst over for telecom players? What will be your agenda now?
I will never say the worst is behind. The pain period is ending slowly. We have sorted out many issues. Industry finances are improving. At TRAI, we are looking at what all of us – Government and regulator – need to do for the next 2-3 years.
What broad trends do you see for the sector?
Over the course of the next one year the industry will see consolidation. A number of companies will merge or die. I have always maintained this. In other markets there are not more than 3-4 players so why should India have 10? By the end of the year, you will start seeing everybody’s EBITDA (earnings before interest, taxes, depreciation and amortisation), margins and ARPU (average revenue per user) going up. Third, you will see that telcos sell assets to repay debts. In terms of policy what’s going to engage our attention is going to be matters such as how you calculate the AGR (adjusted gross revenue), do you use AGR for ISPs, what will you do with infrastructure providers, etc. Another class of issues to be settled are around price of spectrum, re-farming and licence renewals.