Airtel sees a game-changer in new telecom law

Satellite broadband will provide coverage in the remotest areas and would complement terrestrial networks, Vittal said in an interview. The technology of satellite connectivity coming directly to smartphones, which would have otherwise led to competition with existing networks and required auction of access spectrum, was still a decade away, he said.

He further noted that reforms in the licensing framework, spectrum harmonization, rationalization of penalties and right of way becoming part of statute in the new telecom bill, will pave way for better quality of service for consumers as telecom would be considered as an essential service.

Bharti Airtel will distribute OneWeb’s satellite broadband services in India, which are expected to launch next year. Sunil Mittal-promoted Bharti Enterprises, the parent of Bharti Airtel, is a stakeholder in OneWeb, which has now merged with France-headquartered Eutelsat Communications to create Eutelsat OneWeb.

The top boss at India’s second largest telecom carrier said that the provisions in the bill that propose to take over telecom networks in case of emergencies such as war were not controversial. “It’s always been there. It’s there in most parts of the world as well, in case of a national emergency or exigency. It’s part of our licence today also," he said.

On Wednesday, some members of Parliament raised the issue of the level of “temporary takeover" of telecom networks and sought clarity from the government on the instances when this would be justified. Some, like the Internet Society, an American non-profit advocacy group, feel that the bill does not make an explicit distinction between traditional telecom services that use spectrum, and Internet-based services deployed over the general-purpose Internet, thus leaving the door open for regulating Internet-based services.

On whether Airtel’s own OTT app, cloud, and other services that are offered on top of the mobile service would need to be segregated into separate companies to adhere to the new regulations, Vittal said that no such segregation would be needed since the services were already segregated by their respective licences. “It is now clarified that there are licence activities on which a licence fee is payable and non-licence activities on which there’s no licence fee. We don’t have it segregated because whatever revenue we generate on each of our licences, we’re clearly able to segregate it (by licence)," he said.

However, he reiterated the need for a level playing field with OTT players that do not face the same set of regulations that telecom service providers and direct-to-home (DTH) players are subject to, which creates regulatory arbitrage. “It has to be same service, same rules. That’s one point we’ve been making, because this is one of the reasons the DTH industry is under tremendous pressure," he said. Airtel has a DTH play through Airtel Digital TV, which uses satellite connectivity for broadcasting TV content.

Vittal also said OTT players, especially the large four-five companies that generate large traffic, should give a “fair share" of revenues to the telecom players, as they end up “hogging a lot of the investment that has been made on networks". It would “keep Indian tariffs at an affordable level. That’s really the point," he said.

He advocated the need for telecom service tariffs to go up as well such that return on capital employed can rise for telcos and the investments made into networks, now largely for data consumption, can be recouped.