4 min read.Updated: 19 Sep 2020, 10:24 AM ISTIshita Guha
In an interview, Kochhar said telcos should not be viewed as just revenue-generating agencies and the additional cost of replacing Chinese equipment will be a problem
NEW DELHI :
Telecom operators are looking into Telecom Regulatory Authority of India’s (Trai) decision not to regulate over-the-top (OTT) platforms, said S.P. Kochhar, director general, Cellular Operators Association of India (COAI), which counts Reliance Jio Infocomm Ltd, Bharti Airtel Ltd and Vodafone Idea Ltd as its members. In an interview, Kochhar said telcos should not be viewed as just revenue-generating agencies and the additional cost of replacing Chinese equipment will be a problem. Edited excerpts:
Will telecom operators be impacted by Trai’s decision against regulating OTT communication services like WhatsApp?
Our basic contention is if similar services are being provided, irrespective of the platform, then rules of the game should be the same. It can’t be that players provide similar services through OTT and are treated differentially. This impacts the national data policy, sovereignty, security and, of course, it will hurt revenues of telcos.
Have telcos approached the COAI on this issue, and will you urge Trai to revisit its decision?
The association will go ahead with whatever the members propose. Members, I suppose, are in a dialogue with each other. Telcos will study the matter and come out with a response, which I think should be routed through us. I have no reason to believe that there is any difference among the members on the matter. We are awaiting a response from telcos on whether to take it as an appeal or go back to the government.
In June, COAI had written to the finance ministry to lower levies such as spectrum usage charges and licence fee. Has the government responded yet?
No, not yet. It will take time for the government to respond since we are seeking a fundamental change. Telecom services have witnessed a fundamental shift from voice to data, and now we are readying for 5G. Telecom is no longer a vertical that provides services, but is an enabler for all sectors. We have to be viewed as an essential service, which requires a different set of rules, levies and it has to be more societal. Levies and taxes have to be brought down.
Telecom operators have been of the opinion that the reserve price for the next spectrum auction is too high, and it is a deterrent. What is your take?
The penetration of services in rural areas is significantly lower. If we go with the government’s aim of bringing everyone under telecom services, it also has to play a part in making it possible. If the Centre continues to look at telecom as a revenue generator, the type of revenues that the government expects from the telcos may not encourage these firms to expand their coverage. If we have lower taxes, levies and differential policies, then in the interest of the future and national policy, telcos will invest more.
Are we as a country ready for 5G rollout and adaptation?
5G is not only about rolling out the network, the difficult part is making it economically viable in areas where the service reaches. There are hardly any use cases for 5G, especially in rural areas. If you are going for a massive infusion of funds to bring in such a network in India at one go, it may be counter-productive, considering that we may find good use cases in both urban and industrial areas, but we may not find them in the rural markets. 5G will also entail additional equipment cost to users. So, a balanced coexistence of 4G and 5G may be the solution for now.
Telcos are heavily dependent on equipment supplied by Chinese vendors. How will the anti-China sentiments affect telcos?
The sentiment is about our national interest, and we may not want to trade with a certain country. Today it is China, tomorrow it could be anyone else. The good part is that we are using equipment of international standard, which means that devices from any manufacturer are compatible and can be replaced. However, cost will be a problem. Telcos opted for equipment from Chinese vendors as it was cheaper, now that is something which will impact rollouts. The only way to offset the cost differential would be to encourage a faster realisation of Make In India (indigenous production), but it will take time. Until then, we will have to look at more global partners for equipment supplies.
Telecom has been a litigious sector. Almost every other issue ends up in courts - one such example is the contentious definition of adjusted gross revenue (AGR) that lasted for more than 14 years. What do you have to say to that?
Nobody in their right mind wants litigations, which happen as many issues are not resolved satisfactorily by policy or regulation that at times have not kept pace with time. The influx and adaptation of technology in IT and telecom versus resultant policy changes have been extremely fast, and in the interim period, related parties reach out to the courts to protect business opportunities and operations. Otherwise, we avoid getting into litigations. I cannot rule out that there will be no litigations ever. Yes, we have to reduce litigations and that will need concrete efforts of give and take. When redundant clauses are to be removed, we go to courts as executive and administrative routes take a lot of time.