Telcos allege ‘market failure’ at Navi Mumbai airport, ask Trai to cap infrastructure costs

The association has urged the Telecom Regulatory Authority of India (Trai) to examine the conduct of the airport, operated by the Adani Group, in denying telcos right-of-way (RoW) permissions to lay telecom infrastructure, and creating an exclusive, monopolistic in-building telecom arrangement at a public airport.

The issue is significant as travellers have been complaining about the lack of cellular connectivity at the Navi Mumbai airport, which began commercial operations on 25 December. The reason for no connectivity at the airport is the absence of an agreement between the airport and telecom operators. The two sides have not been able to agree on commercial terms for this.

‘Clear market failure’

SP Kochhar, director general of COAI, wrote in a letter dated 13 January to Trai chairman Anil Lahoti, “This arrangement has resulted in a clear market failure. NMIAL/IBS operator, though licensed only as a VNO (virtual network operator), has assumed control over an essential facility, namely in-building access infrastructure within a public airport, thereby creating a monopolistic bottleneck."

According to Kochhar, in the absence of competitive constraints and cost-based regulation, NMIA can impose excessive, non-transparent and non-cost-oriented charges on all telecom operators, which have no alternative but to accept such terms if they wish to serve consumers at the airport.

Telecom operators have therefore urged Trai to lay down and enforce a cost-based pricing framework and appropriate price ceilings for in-building telecom infrastructure in situations where a single entity exercises monopoly control over access at public or captive locations such as airports, metro stations and similar public premises.

Kochhar said, "We respectfully request Trai to recommend appropriate directions to ensure that public entities grant RoW permissions to licensed TSPs (telecom service providers) on a non-discriminatory basis, or alternatively, that any shared infrastructure mandated in such locations is provided strictly on regulated, transparent and cost-oriented terms."

Satya N. Gupta, former principal advisor at Trai, said, “By reaching out to Trai, telcos have taken the right step as what we have seen in these connectivity issues at airports is nothing but a market failure. The regulator has all the power and mandate to fix cost-based charging. The same should not be left to market forces in case of market failure."

In a statement on Wednesday, an NMIA spokesperson said, "Globally, most airports adopt a single, neutral-host telecom infrastructure to ensure uniform coverage, safety and operational efficiency. In line with this globally accepted practice, Navi Mumbai International Airport Pvt. Ltd (NMIAL) is following the established framework adopted at major Indian airports". The airport operator said the pricing for neutral-host in-building solution services at NMIAL is aligned with the rates already established and implemented at other airports run in public-private partnership.

‘Exorbitant charges’

In an earlier letter to the department of telecommunications (DoT), telecom operators said the airport operator had quoted “exorbitant" charges for providing connectivity – ₹92 lakh per month per operator. The operators believe that since they are licensed entities and hold the spectrum, they are legally authorised to offer connectivity at these places based on the RoW rules under the Telecom Act. They have also challenged the appointment of third-party providers by airport and metro authorities, arguing that these intermediaries act as gatekeepers who unnecessarily control all infrastructure and connectivity permissions.

Countering this, the Navi Mumbai airport said it has regularly communicated and discussed the matter with telcos and offered in-building services at charges in line with industry standards. NMIA currently provides free Wi-Fi to passengers. Besides, the Bharat Sanchar Nigam Ltd (BSNL) network is also available at the airport.

It said that since airports are highly sensitive zones, frequent servicing, maintenance and upkeep of the network are necessary. This is best managed by the airport operator with the relevant security clearance from the Bureau of Civil Aviation Security and other security agencies, it added. An NMIA spokesperson noted that involving a third party would significantly increase response times for network issues, resulting in service delays and passenger inconvenience.

Not an isolated case

Telecom operators said that third-party in-building service providers often secure exclusive deals with public entities such as airports, metros and hospitals. These providers then leverage their monopoly to demand 'super-normal profits' or excessive rents from operators, simply for the right to serve their own subscribers on-site.

“Similarly, at many public places, such high charges were accepted by the TSPs under the threat of exclusion and charges are continuously being increased without any correlation to actual costs," Kochhar said.

A similar issue has played out at the Mumbai Metro Aqua line, where passengers have been facing connectivity issues for the past three months and the two sides have not been able to agree on commercial terms to enable mobile connectivity.