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Over legislation is the biggest problem of telecom industry, says B K Syngal

BK Syangal, New Delhi | 01 May 2017

The biggest problem of the Indian telecom sector is that there are so many policies that it is impossible to wade through them. This also implies that there is no policy.

Recent merger of Vodafone and Idea is an example of over-legislation. In at least six markets, the merged entity’s revenue share is more than 50%, which is the limit put up by TRAI. Also, in four circles, the merged entity will overshoot 25% prescribed limit of spectrum in mergers and acquisitions.

Now, these issues will open up these entities to scrutiny from DoT, TRAI, SEBI (for anti-competition practices), without the mention of any due procedures and timelines to adhere to, by the government officials, to process these files.

It is clear that regulator didn’t foresee a spree or M&A in India, due to market related issues, and did not recommend a coherent policy to work out the exceptions, thus leaving the field of arbitrariness. Second, the absence of written policies for processes opens the field for prolonged delays.

Similar arbitrariness exists in the processes related to operationalisation of spectrum after its allocation to the industry players which may take anywhere between 6-10 months and sometimes, even more with no accountability of the government to complete the process within stipulated time.

There are different set of legislations to govern infrastructure, spectrum, license and interconnection related issues with further rules related to Quality of Service (QoS), security requirements, roll out obligation, telemarketing norms etc. The plethora of legislation creates different rules for different set of industries in the overall telecommunications market. Rules for TSPs and OTT (Over the Top) service providers are one such example where they have different obligations while they both, in practice, work in synergy.

Across the world, governments are moving towards ‘Same Service, Same Rule’ premise. In France, regulator has demanded VoIP telephony player to register as a telecom operator, with VoIP having same regulatory framework as telecom in Germany. Thus, under the broad Unified Licensing Policy of the government, instead of creating segregation of services, and creating varied legislations for different players, a broad encompassing legislation should be drafted.

Another example of procedural hurdle is of the issue of import of low powered wireless devices. WPC has mandated obtaining an Equipment Type Approval (ETA) for all wireless equipments and its variants operating in de-licensed frequency.

Importers of wireless equipments are required to submit the sample of device to government accredited lab. It is estimated that INR 3000 cr worth of low powered devices are imported in India. This process takes an average of 4-6 of the time which results in telecom players losing the competitive edge. It further requires a compulsory licensing under Wireless Telegraphy Act. It is recommended that these processes be simplified and lead time be reduced to a maximum of 15-30 days, which is a global standard.

Therefore, it is important for the growth of the industry that there should be transparent and simple regulations and policies.