The licensing regime for the provision of the telecoms sector witnessed a sea change in 2013 with the introduction and implementation of the ‘unified licence regime’. The unified licence regime has been implemented primarily with the objective of ‘one nation, one licence’, as envisaged under the NTP 2012. It replaces the earlier regime where the players were required to obtain separate licences for different telecoms services in India, such as internet services, national long-distance (NLD) services, international long-distance (ILD) services and so on.
The unified licence regime for the first time allows telecoms operators to offer all telecoms services under one licence, subject to separate service authorisation for the provision of different telecoms services, covered by the unified licence. The unified licence covers within its ambit all the fixed, mobile and satellite services and communication both on wireline and wireless media with full mobility, limited mobility and fixed wireless access. The service authorisations covered by the unified licence are:
- access service;
- internet service;
- NLD service;
- ILD service;
- global mobile personal communication by satellite service;
- public mobile radio trunking service;
- very small aperture terminal closed user group service;
- Indian national satellite system mobile satellite system reporting service; and
- resale of international private leased circuit service.
The service areas for each of the service authorisations have also been defined. The unified licence is granted for a period of 20 years from the effective date of the licence. The general, operating, monitoring, financial and security conditions for each of the service authorisations have been divided into the general unified licence conditions (applicable irrespective of the service authorisation) and the specific service authorisation-related conditions (applicable only if the said authorisation has been granted). Apart from freeing up the spectrum from the licence, the unified licence also bars cross-holding in different telecommunications companies.
With regard to the official fees, the charging heads have been defined separately under the unified licence with different limits for entry fees, net worth, paid-up capital, bank guarantees and processing fees. However, where a licensee is applying for more than one service authorisation, the unified licence sets out the upper limits for such financial implications. The prescribed upper limits are also the amounts applicable in cases of the licensee applying for all the services covered by the unified licence. These have been fixed at 250 million rupees each for the minimum equity and net worth of the licensee company, 150 million rupees for the entry fees and 100,000 rupees for the application processing charges. For the provision of the services, an amount of 2.2 billion rupees has been fixed as the performance bank guarantee and 440 million rupees as the financial bank guarantee. In addition, 8 per cent of the adjusted gross revenue (AGR) shall be annually charged from the service providers as the licence fee, which includes the levy for universal service obligations, currently 5 per cent of AGR. However, it should be noted that the mechanism for computation of AGR has been specified for different service authorisations.
In addition to the unified licence, the DoT has also prescribed a registration process for infrastructure provider entities wishing to do business in India. This registration process covers the providers of telecoms infrastructure such as dark fibre, right of way, duct space and tower. The financial requirement for the registration includes a small processing fee and does away with the entry fees and bank guarantee. The infrastructure providers engaging in India would have an easier entry as they would merely have to register themselves rather than obtaining a licence.
To provide telecoms services in India, the players would require the unified licence and spectrum would have to be secured separately through the auction process. The auction of the 2G spectrum and the licences awarded in 2008 were quashed by the Supreme Court of India on the grounds of unconstitutionality; however, many of these quashed licences have been re-auctioned. Separately, the auction of 3G and BWA spectrum was held in 2010 and licences were issued. The last auction was conducted in September-October 2016; it was India’s biggest sale of airwave spectrum. The total of 2,354.55MHz of spectrum offered for sale divided in seven bands, of a value amounting to 5.63 trillion rupees. It was the first time that the DoT had auctioned spectrum in the 700MHz band. However, only 965MHz of spectrum worth 65,789.12 million rupees could be successfully sold. No bids were made for the 700MHz and 900MHz band. It can be deduced that the Indian telcos prefer short-range penetration over the long range.
Recognising the potential of Internet of Things (IoT) and Machine to Machine (M2M), emphasis was laid down in the NTP 2012 as: ‘To facilitate the role of new technologies in furthering public welfare and enhanced customer choices through affordable access and efficient service delivery. The emergence of new service formats such as Machine-to-Machine (M2M) communications (eg, remotely operated irrigation pumps, smart grid, etc) represent tremendous opportunities, especially as their roll-out becomes more widespread.’
It was also believed that launch of various government programmes such as Digital India, Make in India and Startup India will help immensely in driving the growth of the M2M/IoT industry in the country. In addition, many mega projects have been undertaken by the government of India, which will help in the effective and sustainable utilisation of resources by the application of M2M/IoT technology.
In May 2015, the DoT published the National Telecom M2M Roadmap after seeking inputs from certain stakeholders from the industry. The Roadmap focuses on communication aspects of M2M with the aim to have interoperable standards, policies and regulations suited for Indian conditions across sectors in the country. In addition, the Telecom Engineering Centre (TEC) of DoT has also come out with nine technical reports on M2M detailing sector-specific requirements and use cases to carry out gap analysis and future action plans with possible models of service delivery.
After going through a complete process of consultation with the concerned industry representatives and analysing various issues involved and also considering the comments received from stakeholders in their written responses, TRAI issued a set of recommendations on 5 September 2017 on various aspects of M2M services including its regulation under a possible registration process or appropriate licensing and security concerns. TRAI recommended that device manufacturers should be mandated to implement Security by Design principles in M2M device manufacturing so that end-to-end encryption can be achieved, and the government should provide comprehensive guidelines for manufacturing and importing of M2M devices in India.
However, the above recommendations of TRAI have not been fully completely incorporated in to respective policies and guidelines. In this regard, DoT issued a set of instructions dated 16 May 2018, for implementing restrictive features for SIMs used only for M2M communication services and related Know Your Customer (KYC), security and other instructions relating to provisioning of M2M services in India by the licensed telecom service providers.
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