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“Next Generation Policy and Regulatory Environment-India”

Satya N. GuptaChief Regulatory Advisor

India & SAARC, BT Global Services

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Content• Broad ICT scenario – India

• Existing licensing regime -Salient features

• Next Generation India – SWOT analysis of present Licencing framework

• Regulatory Challenges for NGN

• Road ahead – Next Generation Policy and Regulation

Broad ICT Statistics-India (July, 2009)

1) Population- 1.1 billion2) Fixed Teledensity – 3.5 (39 million nos.) 3) Mobile Teledensity – 33.0 (400 million nos.) 4) Overall Teledensity- 40 (440million nos.)5) Internet Connections- 12 million ( 45 mn including wireless)6) No. of PCs- 25 million7) No. of TVs- 120 million8) No. of Cable TV Connections- 65 million9) International Connectivity- 500 Gbps/16.7Tbps (Designed)10) National connectivity- 10 Gbps (7 Lakh Kms)11) Broadband Connection (>=256 Kbps) – 6.5 Millions12) International Gateways - 30 ( Including 9 on Submarine cables)

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NGN – a layered architecture distributing intelligence at every layer

ApplicationLayer

ControlBearer

Service Control Layer Softswitch

ControlIP ServiceSwitching

ApplicationServices

Transport Layer(core and access)

PSTN

Internet

MultiservicePacket Switching

XX X XX

CORE NETWORKS

XNational Optical

BroadbandAccess

GbEGbEDSLAMDSLAM

ACCESSNETWORK

RASRAS

Frame/ATM

Frame/ATM

WirelessWireless

CPECPE

Media Gateways

Metro OpticalX

XX

X

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Emerging NGN Applications – EOIP

Voice over IP Unified Messaging BB - High Speed InternetPrimary line Content Delivery PC to PhoneSecond line Games Phone to PCIP Centrex usage Downloads (MP3) IP VPN (data)Voice VPN Gambling BW on-demandIP Centrex Video on demand QOS on demandTV on demand Quad play

Instant messaging presence managementMultimedia ConferencingVirtualisationCollaborationGrid computing Long distance bypass MMS on fixed networkLocation Based Services (LBS)FMC (Fixed Mobile Con.) Distance learning 3G & beyond applicationsE-CommerceRemote lab IP offload

Institutional Framework for the Indian Telecommunication

Govt. of India (Ministry of Communications &IT)

Wireless Planning &

Coordination Wing (WPC)

DOT/ Telecom Commission

Telecom Engineering

Centre (TEC)

TRAI

Parliament of India

Operators

Manufacturers and System Integrators

TDSAT

Subscribers

Executive and Licensing

Recommendations for Licensing

Type Approvals

Spectrum Management

Policy Making Regulation (Tariff,

Interconnection, QOS) Dispute Resolution &

Appeal for DOT & TRAI Directives

Standardization & Technical Inspection

Service Provision

Act/ Legislation Making

Equipment Supply

Centre for Development of Telematics (C-DOT)

Telecom R&D

End Usage

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Categories of Telecom Licensesi) Access Providers (APs) ----- (Access to Customer/ Local Service)

- Fixed Service Providers/ Basic Service Operators (BSO)- Cellular Mobile Service Providers (CMSP)- Internet Service Providers (ISP)- Cable TV Operators (CaTVO)

ii) Long Distance Operators -----(Long Distance telecommunication)- National Long Distance Operators (NLDO)- International Long Distance Operators (ILDO)

iii) Infrastructure Providers ------(Infrastructure to the Licensed Telecom Service Providers)- Infrastructure Provider Category –I (IP-I)- Infrastructure Provider Category –II (IP-II) – Migrated to NLDO

iv) Value Added Service Providers -(Other than Access & Long Distance Services)- Public Mobile Radio Trunking Service Providers (PMRTS)- Paging Service Providers (PgSP)- VSAT Service Providers (VSATSP)- Voice Mail/ Unified Messaging Service Providers (VMSP/ UMSP)

v) Other Service Providers (OSP) -----(Other than all above, Non-facility based Operators)- ITES, Call Centres- CUG (Closed User Group)- Emergency Communication Services- Tele-medicine, Tele-health, Tele-education etc.

vi) Broadcast Services- Radio & TV Broadcast (FM, Terrestrial TV etc.)- DTH- Cable TV

Combined as Unified Access Service (UAS) since Oct’03

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Service specific licensing in India

NilNilApplication services

Site SpecificOSP (Other Service Providers)

NilNilNANationalInfrastructure Providers Cat I

5%NilLimited One way

City wise and Circle wise

Public Mobile Radio Trunked Service

Nil (6% for Internet Telephony)

Rs. 3 Million (All India)

-do-National, Circle wise

Internet Service Providers

5%One Way Interconnection

with PSTN

City wise and Circle wise

Radio Paging Service Providers

6%Rs. 3 millionNo Interconnection

NationalVSAT

6%Rs. 10 million-do-InternationalGlobal Mobile Communication by

Satellite

Type A - 10%Type B - 8%Type C - 6%

Different for each Circle based on bidding for 4th

license

-do-CircleUnified Access (Fixed and Mobile)

(UASP)

6%Rs. 25 million-do-NationalNLD

6%Rs.25 millionFull PSTN/PLMN Interconnection

InternationalILD

Annual License Fee (% revenue share)

Entry FeeConnectivity with PSTN

Service AreaType of Service

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Promoting Competition and Liberalisation in Phases

Monopoly

Duopoly in Access, Monopoly in Long distance

Nation wide Duopoly

Monopoly in Access,

competition in Long distance

Open competition

3-4 operators

Unified Licensing/ Authorization (de-licensing)

MobileFixed

Value Added Services (VAS)

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3 Unrestricted entry in all segments e.g. India

Duopoly

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Single service-agnostic license for all telecom services and class license (authorization) for all value added services

Unified Access

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Salient features of existing regime• Unified Access (technology-neutral) – coexistence of GSM/ CDMA

(WLL), Fixed• Very low termination rates (< 1 cent/min) (same for fixed and mobile)• Very low carriage charges (1 cent/min)• Very low mobile tariff (2 cent/min)• Very low long distance tariff (2 cent/min)• Very low ARPU (8 US$/month)• Very low Broadband charges (5 US$/month)• Low rural tele-density (< 12%)• Unmet mobile network coverage (< 75% of population)• Overcapacity for international bandwidth (17 Tbps/ 500 Gbps)• Wide spread national backbone (7.5 lakhs Km) • Dominance of wireless access (365 million mobiles vis-à-vis 39 million

wirelines)• Monthly subscribers additions – >10 million• Large cable TV homes population- (65 million)

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Telecom India – A SWOT Analysis

–Strength of present policy framework

–Weaknesses

–Opportunity

–Threats/ Risks

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Strength of present Licencingframework

• Open unrestricted competition in all segments (including mobile)• Access service provision unified (broadband, triple play, internet

telephony permitted in addition to voice, fixed/ mobile/ WLL) • General technology-neutrality (technology option left to operators)• General tariff forbearance (Except leased lines where competition

is not enough)• Broadband policy in place (Govt’s mission to accelerate access)• Access network dominated by wireless (440 million out of 480

million)• More than 10 million mobiles additions per month • 65 million cable TV homes and 39 million wirelines• Proactive regulator (initiatives on emerging issues like VOIP

NGN,IPv6,Unified Licensing,Resale in IPLC,MVNO,MNP,CallingCards,Waiving off of ADC etc.)

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Weaknesses-Major Challenges• Multiple regulatory agencies - licensor (DOT),

spectrum management (WPC), technical regulation (TEC), interconnection, tariff & QOS (TRAI),disputesettlement(TDSAT),USO,SecurityAgencies,Competition Commission – (Fragmented) .

• Policy Maker, Regulator, Incumbent Operator –managed by same cadre on reversible secondmentbasis.

• Non-functional separation of national infrastructure (no competition for bottleneck facilities)

• Legacy interconnection regime- Usage based,CPNP• NO General Resale(non-facility based operators) • Value-added service providers,ISPs not treated as

interconnection entity and not allowed full play.• USO Adm-A Govt. Arm-Huge Unspendable Surplus

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Opportunity• Large unmet demand for telecom services (telephony tele-

density– 38%, Broadband penetration - 0.5%)• Mobile coverage only 75% (25% of large geography green)• Rationalization of network resulting into simplicity and

reduced OPEX• Network expansion by using future proof technology (NGN)• EX-ANTE regulation for NGN to remove uncertainties • Involvement of industry in various issues fully in a pro-

active manner• Learn from the experiences of developed countries • Be a part of NGN pioneers for the region (Asia-Pacific)• Bring urban services to rural area (bridge digital divide)

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Threats

• Standards and interoperability issues yet to be settled

• Technical challenges in Emergency access/ Security monitoring

• High CAPEX without corresponding increase in ARPU ( ROI Issue)

• Project oriented risks due to huge scope and costs in dynamic technology environment

• Uncertainty over spectrum issues

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NumberingNumbering

Regulation of“Plain Old Telephone

Service (POTS)”

Regulation of“Plain Old Telephone

Service (POTS)”

Quality of ServiceQuality of

Service

“Next Generation” Long term issues

Emergency Access

Emergency Access

PrivacyPrivacy

SecuritySecurity

CompetitionCompetition

Consumer protectionConsumer protection

InterconnectionInterconnection

Core policy areas:•Competition (level-playing field), Interconnection•Consumer (QOS, privacy, emergency access)•Security & legal interceptionScope for light-touch regulation

Regulatory implications of NGNSource: ASTAP05_WS.IP&NGN-09

InterconnectionInterconnection

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Road ahead – Next Generation Policy and Regulation

• Unification of Licensing and regulatory functions – Converged Regulator with Empowerment and Autonomy

• Manning of regulatory positions by industry experts also and not only from incumbent and government

• Autonomy to USO Adm and Moratorium on USO Levy • A single technology-neutral, service-agnostic license (one license - one

network – all services)• Class/Authorisation for value added , application and content services • A capacity based, open access, interconnect regime • Functional separation of incumbent to unlock the potential of existing

infrastructure and to enable competition• Telecom Ombudsman to enforce QOS. • Next generation telecom policy based on emerging technological and

regulatory trends to encourage the investment, innovation and competition

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Thank You

Satya N. GuptaChief Regulatory AdvisorIndia and SAARC, BTGS

E-mail: satyen.gupta@bt.com,