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M. Karunakaran

Which way, to the future?

Thomas K Thomas

Telecom networks in India are set to undergo a major change over the next few years. While mobile operators will migrate to third generation (3G) technologies, fixed line operators will start rolling out Internet Protocol-based services such as IPTV and packet-based broadband network. But even as these next generation networks (NGN) are set to change the way we communicate, are the operators and the policy framework geared up to take on the challenges that these new technologies will present?

In order to address this issue, the telecom regulator had issued a consultation paper in January 2009 seeking the industry view on whether there was a need to change the existing licensing and regulatory framework to enable easy migration to the new IP-based technologies.

The challenge before the Authority is how to maintain a balance between the existing regulatory framework and fast technological developments taking place in the telecom sector. For example, though currently telecom and TV services are being offered by two distinct sets of operators, technology such as IPTV is allowing telecom companies to move into the cable TV operator’s turf. Similarly Internet Service Providers have so far been offering data-based services but they will be able to start providing voice services through technologies such as Net telephony and WiMax-based broadband.

“Sticking to the existing regulatory framework may restrict fruits of technological advancement reaching the common masses; whereas permitting new technologies and applications and encouraging use of IP networks contradict existing regulatory provisions and may affect a level playing field,” says a TRAI official.

TRAI’s paper has sparked off a debate in the industry with most of the existing operators not in favour of any regulatory intervention. ”Moving out of the present licensing classification is not pertinent for either deployment of NGN or migration to NGN. The existing licences are inclusive and permit operators to offer all types of access services. Further, the operators, based on their evolution plans and strategies, including techno-economic considerations, could evolve their networks from current technologies to next generation technologies,” says T.V. Ramachandran, Director General, Cellular Operators Association of India, representing the interests of the existing GSM players.

The Association of Unified Telecom Service Providers of India, the industry body lobbying on behalf of the CDMA players and rival to the COAI on most policy issues, agrees with the GSM camp on this issue.

“The existing licensing structure provides a lot of flexibility in the choice of technology as well as provision of value-added services wherein most value-added services can be provided under Unified Access Service Licence. NGN represents just another generation of technological evolution and all presently licensed operators in the sector will, anyway, have to adopt latest technologies in their network over a period of time,” says S.C. Khanna, Secretary, AUSPI.

The resistance on the part of existing players to any change in the current licensing regime arises from the fear of three things. First, the possibility of having to pay additional licence fee or entry fee to the Government for acquiring a next generation network licence even as they claim that their existing unified access licence allows them to offer all types of services.

They also fear having to face competition from a new set of NGN players as a result of the proposed new licensing regime.

Most of the existing players such as Bharti Airtel and Reliance Communications are large integrated players with licences for all types of telecom services on offer. “NGN could unleash a totally new breed of service providers that could eat into the existing player’s turf. Just like paging operators were made irrelevant with the advent of cellular technology, next generation technologies can change the dynamics of the market very quickly. Under the existing licence regime, existing players will continue to hold the controls of who can or who cannot enter this market and that’s why they are opposing a change,” says a market analyst.

The third issue that may be challenging the existing players could be the high cost of migrating to an NGN environment. “NGN essentially requires an IP-based network with soft switches. Existing operators globally are figuring out how to deal with their investments made over the years in building a legacy network. This is not an easy decision for them compared to a new operator who can set up a green field IP network,” says Vijay Yadav, Director - South Asia, UTStarcom — an equipment vendor supporting NGN technology.

On the other hand, niche players who are looking to increase their role in the Indian telecom space are pushing the TRAI to rejig the licensing regime. “There is an urgent need to change the present regulatory and licensing framework to facilitate deployment of NGN in the country. India still has service-specific licensing where different services require different licences. Also, approvals are required for providing value added and application services over and above the basic service being provided under a licence. This is overly burdensome and represents a barrier to entry. As NGN enables provision of multiple services through the usage of same network, that is, the concept of ‘single network- all services’, the service specific licensing framework should be replaced by service-agnostic licensing where, by obtaining a single licence, a service provider could provide all the services that NGN enables,” says Satyen Gupta, regulatory officer for BT India, in a note sent to the TRAI.

Neutral analysts agree that there should be a review of the licensing regime. B.K. Syngal, Senior Principal, Dua Consulting, and former Chairman of VSNL, says “The present telecom services in India are fragmented on the basis of service provided. This means there are separate licences, revenue shares and regulations for different services such as long distance telephony, unified access licence, cellular mobile services, basic service operators, ISPs and VSAT. Moving forward, Government must do without multiple service dependent licences. The emphasis should be on making the regulatory framework both technology and service independent. This would, in turn, mean that there should only be one licence that permits access services via any means and there should be single licence for any and every type of service provisions.”

Globally, policymakers and regulators are already responding to the challenges posed by NGN by modifying aspects of its regulatory framework to foster new technologies. An example of simplifying licensing categories into broad categories of services is Malaysia, where the adoption of a new licensing framework simplified the existing 31 service-based licences into four broad technology-neutral licensing categories.

Singapore’s method is another example of licence simplification. There are only two categories of licences for the provision of telecommunications services. Some countries including Peru, Tanzania, Nigeria and some EU member states are adopting models of simplification based on unified authorisation system that covers most or all services. But established players in India argue that the framework in the country is already simplified under the unified access licence.

“Today almost all telecom networks in the country are capable of providing voice and data with their IP architecture in the core network, some operators have even started offering other enhanced services such as streaming audio and video. Similarly, the wireline operators are also already providing high-speed data services using ADSL in the access network,” says Bharti Airtel in response to the TRAI’s consultation paper.

The TRAI is expected to take a final view on this issue shortly. However, a decision either way will not be the end of this debate.

tkt@thehindu.co.in

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