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Photo: Mint
Photo: Mint

Opinion | A land of missed calls and revised deadlines

Some distortions of the telecom market caused by India’s ‘caller pays’ regime are showing up only now. This system was to be phased out, but it’s taking much longer than envisaged

Cell phone users in India must sharpen their reflexes, now that telecom service providers have reduced the ringing limit for outgoing calls to 25 seconds. The sounds that alert us to incoming calls are not exactly costless. Every ring eats up radio frequency, and Indian telecom companies cannot be faulted for wanting to move towards international standards, particularly after the telecom regulator flagged the issue last month. A majority view in favour of rings that last 30 seconds, though, was lost in a haze once Reliance Jio set the cut-off limit for its outgoing calls to 25 seconds, and its rivals Bharti Airtel and Vodafone Idea followed suit. Such a short ring duration lends itself to accusations of being designed to induce call backs from call recipients who are unable to respond in time. Under a “calling party pays" framework, an operator that originates a call must pay a termination fee to the network that answers. This means a net gain is made if more calls come in than go out to other networks. This intake constitutes a sizeable chunk of operator revenues, now that consumers themselves pay so little for the services they avail of.

However, as technology pulls down the cost of carrying voice traffic, termination fees are to be phased out. The payment system is currently the subject of a policy rethink on a sunset date for it. Packet switched networks, such as those using 4G cellular technology, render these charges redundant. The government is hopeful that domestic telecom firms would have upgraded their grids and moved enough of their legacy subscribers onto these networks by the end of this year. Disappointingly, the shift has been very slow. Every second cellular subscriber in India is still on either a 2G or 3G network. Although Jio has all its users on a 4G network and Airtel has tripled the size of its 4G grid in two years, only about half the handsets selling are 4G-enabled. Setting up spiffy new networks is one thing, getting subscribers to embrace them is quite another. For Jio, it was part of its game plan. Having bet its future on a rapid upgradation curve, it took just three years to expand its share of subscribers to around one-third of the total by bundling cheap tariff plans with elementary handsets hooked to its network. For Bharti Airtel and Vodafone Idea, which were left vastly indebted by the large sums they paid for 2G and 3G spectrum, pushing most of their subscribers to the latest available generation of mobile technology has been a far stiffer challenge.

The axing of termination fees was to mark India’s mass upgradation, and the regulator’s second thoughts over a deadline for it amounts to an admission that progress has been slower than envisaged. Any reassessment of the situation would have to address the incentive that operators have to resist change, reluctant as some may be to let go of the money raked in that way. If the status quo persists, millions of mobile subscribers could be left with outdated means of communication. The burden of high spectrum fees has already acted as a drag on the adoption of new technologies. As India gears up to roll out 5G services, telecom regulation must help the sector strike an optimal balance. The country has always taken a dual-lane approach to wireless telephony. A slow lane is alright, so long as the fast lane keeps up with the rest of the world.

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