New Delhi: The Telecom Regulatory Authority of India (Trai) announced consumer-centric recommendations as well as a tariff order on Tuesday that will help the cause of financial inclusion by enabling mobile banking, curb monopolies in cable networks, and allow people responding to an emergency (such as floods) keep in touch.

In a conference on the new mobile banking regulations on Wednesday, Trai chairman, Rahul Khullar said the aim is to keep costs low and enable access across the country.

The telecom regulator’s mobile banking recommendations included guidelines on unstructured supplementary service data (USSD)-based mobile banking services. USSD services enable an operator to communicate with users, as is the case with Airtel’s *121# service. Users can perform basic banking operations through this.

“We have come out with a framework to help bank agents to interface with service providers for the use of SMS, USSD and IVR (interactive voice response) channels to provide mobile banking services. The authority wants to utilise the benefits of mobile banking for financial inclusion," Khullar said.

The Mobile Banking (Quality of Service) Regulations come into immediate effect, while a tariff order takes effect on 1 January to allow operators to get their billing systems in place, Khullar said.

Trai has mandated a tariff ceiling of 1.50 per USSD mobile banking transaction that the telecom firm would collect from subscribers.

Trai has also mandated that all banks would necessarily have to tie up with all operators to enable all consumers access to their bank accounts, irrespective of the bank or service provider.

“On 30 September 2013, there were about 87 crore mobile subscribers in the country, of which about 35 crore were in the rural areas. The fact that large number of mobile subscribers in rural areas do not have access to banking facilities presents an opportunity for leveraging the mobile telephone to achieve the goal of financial inclusion," the Trai paper on the new regulations said. The service would allow users to perform basic banking transactions including cash deposits and withdrawals, balance enquiries and money transfers.

The regulations have also been forwarded to the Reserve Bank of India (RBI) and the finance ministry.

The banking and the telecom regulators need to work together to make mobile banking possible, an expert on financial inclusion said.

“The main constraint to financial inclusion is the opening of a bank account. After that, the operation of that account, given the small size of the transactions in rural areas, is not very economical," said Vijay Mahajan, chairman of livelihood-promoting organization Basix. “Trai and RBI need to come together to solve the problem, but there is still a long way to go."

Meanwhile, the telecom regulator also released its recommendations on priority call routing of people involved in response and recovery work during emergencies such as natural disasters.

In the case of emergencies such as the Uttarakhand flash floods and the Odisha cyclone, the mobile networks collapse, making it difficult for rescue and recovery, Khullar said.

On the issue, Trai recommended setting up a government-funded (budgetary allocation) priority call routing (PCR) scheme should be instituted to ensure that calls of personnel responsible for “response and recovery" during disasters are routed in priority.

“Enhanced multi-level precedence and pre-emption (eMLPP) based priority call routing should be implemented in wireless networks in India along with the right to pre-empt ongoing calls, if needed," a statement on the recommendations said.

Trai has recommended setting up a standing committee, chaired by the home secretary and comprising officers from the department of telecommunications, Trai, the National Disaster Management Authority, the Telecom Engineering Centre and industry representatives.

The regulator has also recommended that all telcos enter intra-circle roaming arrangements, to ensure emergency responders have access to whichever network is available.

On broadcasting, the regulator recommended that any multi-system operator (MSO), a large cable operator that has many others under it, cannot have more than a 50% market share in a particular state in a bid to prevent the formation of monopolies of interest and to ensure fair competition in the television distribution market.

“The threshold value for any individual/group entity contribution to the market Herfindahl-Hirschman Index (HHI) should be no more than 2,500," as per the recommendations from Trai.

HHI is the measure of competition or market concentration in a particular state, and a market HHI of 2,500 corresponds to a 50% market share approximately.

The move will bring cheer to consumers in the states of Tamil Nadu, Punjab, Odisha, Kerala, Uttar Pradesh and Andhra Pradesh that are dominated by one cable operator.

In other recommendations, all MSOs and local cable operators (LCOs) need to seek the regulator’s approval for merger and acquisition deals and entity arising from such deals cannot exceed the 50% market share cap.

Trai has given 12 months to group entities having more than a 50% market share in a particular state to limit their control in various MSOs and LCOs.

“These recommendations are going to be disputed. The idea of having these large MSOs is to get the benefits of larger economies of scale as the cable business is fibre-dependent and India has huge geographic area," a media analyst said on condition of anonymity. “It’s not a healthy sign for the industry, though one appreciates the monopolistic aspect of it."

Currently, India’s cable operators are governed by the Cable Television Networks (Regulation) Act, 1995, and the Cable Television Networks Rules, 1994. Neither restricts the number of providers operating in any particular area.

There are no restrictions on the area of operation and accumulation of interest in terms of market share in a city, district, state or the country by MSOs.

Trai issued a consultation paper on monopoly and market dominance in cable TV services in June, inviting comments from stakeholders and finalized its suggestions after discussions.

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