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Telecom Regulatory Authority Of India (TRAI) Recommendations Threaten Mobile Broadband Investment And Deployment In India

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The GSMA today stated that the TRAI’s recommendations on the “Auction of Spectrum” will set India back in its goal to deliver “Broadband on Demand” to the citizens of India. The proposals disregard international best practice in spectrum policy and jeopardize the investment of billions of US dollars in new mobile infrastructure in a sector that either directly, or indirectly, employs almost 10 million people and serves more than 911 million consumers.

The European 3G experience more than a decade ago made clear that auctions designed to maximise revenue, hinders the development of the mobile sector and the socio-economic benefits that mobile delivers to the public. Reducing the ability of mobile operators to invest in network upgrades and expansion would undermine the ability of India to leverage its telecom infrastructure to empower citizens and businesses, especially those in rural communities, to participate equitably in the Internet economy. For example, the TRAI’s proposed reserve prices for upcoming spectrum auctions are so prohibitively high that they will inevitably curtail mobile operator investment in Mobile Broadband infrastructure and increase prices to consumers.

Given the strong correlation between mobile penetration and socio-economic development – with a 10 per cent increase in Mobile Broadband penetration delivering as much as US$80 billion (INR 3,506 billion) of extra revenue for India’s transport, healthcare and education sectors by 2015– the TRAI’s recommendations will not serve the interests of the broader Indian economy.

“Efforts to squeeze money out of mobile operators for some perceived short-term gain will only reduce investment in networks, inhibit growth of mobile services and drive up consumer prices – limiting the value the public will derive from the spectrum resource in the long term,” said Franco Bernabè, Chairman of the GSMA and Chairman and CEO of Telecom Italia Group.

TRAI’s recommendations would not only drive up the cost of the mobile spectrum, but would also create artificial scarcity of this critical resource. In advance of license renewal, TRAI has proposed to force current 900 MHz licensees out of the band into the 1800 MHz band. As a result, TRAI would limit the available spectrum in the upcoming 1800 MHz 2G auction and leave the remainder under-utilised for a significant period, creating unnecessary scarcity at a time when India has an opportunity to shape the future of the mobile industry. This effectively means that billions of US dollars of investment would be wasted.

Earlier this month, the GSMA announced that India was positioned to surpass the US as the second largest Mobile Broadband market in the world within the next four years. In recognition of the threat to this potential, Anne Bouverot, Director General, GSMA, commented, “The GSMA’s member operators in India have invested heavily and worked hard to deliver innovative services to consumers and positively impact the broader Indian economy. They are naturally very concerned about the TRAI recommendations, which have the potential to stifle investment in India’s mobile sector. The GSMA and its members are seeking an open dialogue with the Government of India on the licensing of the critical spectrum with the aim of finding a solution that will drive investment and growth in mobile communications and more broadly in the Indian economy.”

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About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com

For further information, please contact:

GSMA Press Office
press@gsm.org


[1] GSMA and Analysis Mason, August 2011

 

GSMA Announces that India Will Become the World’s Second Largest Mobile Broadband Market Within Four Years

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Additional Spectrum Needed to Ensure India Builds on Momentum; Affordability Key to Long-Term Mobile Broadband Growth and Social and Economic Prosperity

3 April 2012, New Delhi: The GSMA today announced that India will become the second largest Mobile Broadband1 market globally within the next four years with 367 million Mobile Broadband connections by 2016. In doing so, India will overtake the US, which will account for 337 million Mobile Broadband connections by 2016, but will still be second to China, which will have reached 639 million Mobile Broadband connections in the same period.

Since 3G licenses were first awarded to mobile operators in India in September 2010, Mobile Broadband connectivity has grown steadily. There are now more than 10 million HSPA connections across the country, and this is expected to grow exponentially, by 900 per cent, to more than 100 million connections in 2014. This will make India the largest HSPA market worldwide within the next two years, surpassing China, Japan and the US in the process.

“The mobile industry in India is set for immense growth as Mobile Broadband technologies such as HSPA and LTE start to proliferate, but there is scope for far greater development,” said Anne Bouverot, director general of the GSMA. “To take full advantage of this, the Indian government should facilitate the timely release of additional spectrum in a fair and transparent way for all stakeholders. The benefits are clear to see – a 10 per cent increase in Mobile Broadband penetration could contribute as much as US$80 billion (INR 3,506 billion) of revenue across the country’s transport, healthcare and education sectors by 20152.”

Affordability a Prerequisite to Long Term Growth in India

According to a recent study3 by the GSMA’s Wireless Intelligence service, despite a large rural population, mobile growth in India is being largely driven by more affluent communities in cities. Net additions in urban areas reached 85 million last year compared to 57 million in rural areas, with mobile penetration increasing by 20 percentage points in urban areas to 161 per cent, against a 6.5 percentage point rise in rural areas to 36.6 per cent.

The provision of Mobile Broadband in rural and remote areas will help India bridge the so-called “digital divide”. It will improve productivity, help overcome the constraints of transport infrastructure and provide much needed services such as banking, health and education. Given the significant social and economic benefits, expanding affordable access to Mobile Broadband should be a high priority of the Indian government.

According to Wireless Intelligence, with an average retail price of US$500, the cost of an LTE smartphone is four times the average monthly GDP per capita in India, and at an average of US$200, the retail price of an LTE USB dongle is twice an Indian’s monthly income on average4. As LTE networks proliferate worldwide and more devices become available, costs will come down. Initiatives like the introduction of the low cost Aakash tablet in India are helping spur widespread access to the Internet in emerging markets, but more can be done.

“It is important that all citizens in India have access to high-speed Internet connectivity and the transformative opportunities it provides,” continued Ms. Bouverot. “The current average cost of an LTE device is prohibitive for the uptake of Mobile Broadband for those on low incomes. The GSMA is committed to working with its mobile operator members to investigate innovative ways in which to make access to the mobile Internet more affordable for all.”

The GSMA today also announced it has opened a permanent office in New Delhi and recently made two new hires: Sandeep Karanwal, head of GSMA’s India office, and Nitin Sapra, the GSMA’s manager for spectrum and regulation policy in India. Ms. Bouverot continued, “It is an exciting time to launch our new office, as India is an increasingly critical market for the mobile industry, both commercially and in policy terms, through its influence throughout Asia Pacific and the world.”

Supporting Operator Quotes

“India is taking great strides towards the uptake of data and already has the third largest Internet subscriber base in the world with more than 100 million users, and the second largest Facebook subscriber base in the world with 43 million users,” said Sanjay Kapoor, CEO – India & South Asia, Bharti Airtel. “Various studies have shown that a 10 per cent increase in mobile penetration could lead to 1 per cent increase in GDP, and a 10 per cent increase in Mobile Broadband penetration could deliver a 1.4 per cent increase in GDP. Along with 2G and 3G, when 4G is deployed, India will be at the forefront of cutting-edge Mobile Broadband provision globally. We are delighted to work with GSMA to help expedite this phenomenal growth and deliver Mobile Broadband to every corner of India.”

“In the decade and half since the launch of mobile services, the spin-offs for India and its people have been tremendous. GDP growth rates have increased, thanks in large measure to the empowering effects of mobile telephony. India is now poised on the cusp of another tectonic shift – but this can only happen if more harmonised spectrum is released, ensuring high-speed broadband connectivity is available at reasonable rates, which will allow India to bridge the telephony divide and join the ranks of the growing Mobile Broadband ecosystem,” said Mr Himanshu Kapania, Managing Director, Idea Cellular.

“Mobile Broadband, which is emerging as one of the strong growth areas in the Indian telecommunications sector, can contribute significantly to the social agenda of bridging the digital divide,” said Mr Srinath Narasimhan, Managing Director of Tata Teleservices Limited. “As newer technologies and faster data speeds become available, affordable next-generation devices in various form factors – supporting an ever-growing list of lifestyle-impacting applications, services and solutions – will be key to this growth. We will continue to work closely with device and solution players worldwide, and with the GSMA, to create the right and enabling ecosystem to successfully take the data story forward.”

“We have experienced the rapid growth of mobile communications in India and its vast socio-economic impact. Our perspective is that further Mobile Broadband proliferation can be achieved most rapidly and affordably through data services on 2G, in combination with 3G and LTE. Continued investment, however, depends on a stable and predictable regulatory environment as well as the availability of spectrum,” said Jon Fredrik Baksaas, President and CEO, Telenor Group.

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Notes to Editors

1Mobile Broadband technologies: WCDMA, HSPA, LTE, TD-LTE, TD-SCDMA, CDMA2000 1X EV-DO – Wireless Intelligence, April 2012

2GSMA and Analysis Mason, August 2011

3Wireless Intelligence: Urbanisation driving growth in BRIC countries

4Wireless Intelligence: Global LTE network forecasts and assumptions – one year on

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com

About Wireless Intelligence

Wireless Intelligence is the definitive source of mobile operator data, analysis and forecasts, delivering the most accurate and complete set of industry metrics available. With 8 million individual data points – updated daily – the service provides coverage of the performance of all 950 operators and 800 MVNOs across 3,500 networks, 55 groups in 236 countries.

Media Contacts

Nupur Chandra (India)
T: +91 995 3143 209
E: nupurchandra@corvoshandwick.co.in

GSMA Press Office
press@gsm.org

TS.16.1.1 – TAC Allocation Process for India

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The Indian Telecommunications industry is one of the fastest growing in the world. India is the second largest telecom provider worldwide. The impressive growth seen to date, and future potential, has attracted a lot business interest from within India and internationally.

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Government and Industry Unite to Support Mobile Broadband in India

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Government of India, GSMA, COAI and TRAI Call for Greater Spectrum Allocation for Mobile Broadband Services

The Honourable Minister for Communications & Information Technology of India, the GSMA, the Cellular Operators of India (COAI) and the Telecoms Regulatory Authority of India (TRAI) announced today that they will work together to help facilitate growth of Mobile Broadband services across India. Shri Kapil Sibal, the Honourable Minister for Communications & Information Technology, Rob Conway, CEO, GSMA, Sanjay Kapoor, Chairman, COAI and CEO, Bharti Airtel India & South Asia and Dr. J. S. Sarma, Chairman, TRAI outlined this collaboration during the ‘Mobile Broadband – India Empowering the Mobile Ecosystem’* seminar which took place at the Imperial Hotel in New Delhi today.

The growth of mobile communications in India is the result of a successful partnership between the Indian government, the regulator and the mobile community. This news demonstrates the shared commitment by all parties to address the need for nationwide broadband connectivity. The seminar focused on how Mobile Broadband, delivered using next-generation LTE technology, can help connect all citizens across urban and rural areas, to the Internet. This will further stimulate the Indian economy and provide people, especially those in rural communities, with access to online information, improving health, education and employment prospects, as well as providing access to financial and government services.

Shri Kapil Sibal, the Honourable Minister for Communications & Information Technology stated: “India has always been a global leader in information technology, providing the world with much needed leadership and direction in IT and research and development. However, it is time to bring the Internet revolution to our rural communities and I believe Mobile Broadband will play a significant role in achieving this. The Indian government understands the need for wireless broadband connectivity and is working towards making adequate spectrum available to support these services.”

Rob Conway, CEO, GSMA commented: “Mobile Broadband has transformed the reach of the Internet, with more than 450 million connections across the globe. Through sufficient spectrum allocation, India can become a leader in the provision of Mobile Broadband and take advantage of the huge economic benefits, which could generate more than INR 3,146 billion to India’s GDP by 2020. We fully support the Indian government in its efforts to connect all its citizens to the Internet and look forward to the early release of spectrum in both the 700MHz and 2.6GHz bands in line with international efforts.”

Mr. Sanjay Kapoor, Chairman, COAI and CEO, Bharti Airtel India & South said: “The global mobile industry achieved an important milestone last year when mobile data traffic surpassed total voice traffic. With the exponential growth of Internet users in India it is only a matter of time when we will follow suit. In witnessing the rapid adoption of mobile voice services, I am convinced that India will soon be at the forefront of next-generation Mobile Broadband technology. COAI is committed to working with the GSMA, TRAI and the government to meet the demands of Mobile Broadband and to provide universal Internet connectivity that will empower and enrich the lives of millions of Indians.”

Dr. J.S. Sarma, Chairman, TRAI continued: “TRAI is committed to developing an ecosystem to meet the need to connect our citizens in line with the National Broadband Plan. Mobile Broadband will play a significant role in meeting our target of 160 million broadband connections by 2014.”

The seminar also addressed how improved spectrum access for Mobile Broadband could transform the Indian economy. If India seizes the initiative, the booming high-tech industry, in particular, could take a global lead in developing low-cost Internet-capable HSPA, LTE and TD-LTE smart devices, as well as related applications and services, for use across India and other international markets.

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Notes to editors

*Seminar hosted by the GSMA and COAI in New Delhi on 11th April 2011. Additional speakers included senior representatives from Aircel, Bharti Airtel, Boston Consulting Group, Ericsson, IDEA Cellular, Qualcomm, Tata, Uninor and Vodafone Essar.

GSMA Calls for Additional Spectrum to Enable Truly Ubiquitous Mobile Broadband Coverage across India

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The availability of 3G and Broadband Wireless Access (BWA) licences in India will help accelerate the much-needed deployment of Mobile Broadband networks and services across the country, and will be instrumental in helping the Indian government to achieve its ambitious target of 20 million broadband subscribers by the end of this year, the GSMA announced today.

However, with the absence of fixed line infrastructure, additional low frequency spectrum in the digital dividend band (700MHz) should also be licensed to operators to deliver Mobile Broadband across India’s vast rural areas due to lower costs and quicker time to market as a result of less infrastructure build out. According to the Telecom Regulatory Authority of India (TRAI)*, 70% of the Indian population reside in rural areas, and of the country’s current 9 million broadband subscribers, just 5% are based outside major cities.

“To meet the growing demand for Internet access, the Indian government needs a comprehensive band plan strategy that will enable operators to roll out services in both highly populated and rural areas,” said Jaikishan Rajaraman, Senior Director at the GSMA. “This is best achieved through a combined frequency plan: low frequency spectrum, such as the digital dividend, is ideal for rural and in-building coverage; high frequency spectrum, like that recently licensed in the 2.1GHz and 2.3GHz bands, and the yet-to-be licensed 2.6GHz band, is ideal for ensuring coverage and capacity in densely populated areas.”

The widespread availability of Mobile Broadband, particularly if digital dividend spectrum is licensed in the medium term, will herald a new era of social inclusion across India. Nationwide broadband connectivity will fuel innovation across all sectors of the Indian economy, promoting services such as e-government, mCommerce, telemedicine, financial services and e-learning techniques, as well as enabling India to build on its existing strength as a major global ICT force.

Rajaraman continued: “The Indian telecoms market has been a story of intense competition, amplified by the lack of fixed line infrastructure. The deployment of Mobile Broadband across the whole country will change this and go beyond merely providing enhanced application and network performance. It will also offer a catalyst for business model innovation, driving change in how services are delivered and how revenues are generated. The potential for India is enormous, but will only be realised if spectrum is available and allocated equally to urban and rural areas.”

Following India’s recent spectrum auctions, seven mobile operators are now licensed to deploy HSPA technology in the 2.1GHz band, with a further six companies successfully securing BWA spectrum in the 2.3GHz band, which can be used to deploy LTE technology. Not only does HSPA offer a clear upgrade path to LTE, both technologies will interoperate seamlessly and also benefit from the global economies of scale that the GSM family of technologies provide, enabling the proliferation of affordable and accessible Mobile Broadband devices and services in many parts of India.

Notes to editors
*TRAI consultation paper on National Broadband Plan for India.

About the GSMA
The GSMA represents the interests of the worldwide mobile communications industry. Spanning 219 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA is focused on innovating, incubating and creating new opportunities for its membership, all with the end goal of driving the growth of the mobile communications industry.

For more information, please visit Mobile World Live, the new online portal for the mobile communications industry, at www.mobileworldlive.com or the GSMA corporate website at www.gsmworld.com.

For further information please contact:
Pragya Goel,
Gutenberg CCgroup
+91 9810 486 705

India needs to rethink its universal service policy

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GSMA calls for market forces to be allowed to bring down cost of mobile

The GSM Association, the global trade association for the mobile industry, has called on the Indian government to cut in half the 5% levy on telecom operators’ gross adjusted revenues, which is channeled into the Universal Service Obligation Fund (USOF). The levy is increasing operators’ costs and ultimately the cost of mobile services for consumers. The GSMA recommends that the unspent $2.5 billion in India’s USOF be used to help tackle the bottlenecks, such as a lack of backhaul capacity and electric power, currently slowing down the rollout of mobile networks into rural areas.

“Universal Service Funds are another telecoms-specific tax that increases the cost of access for consumers,” said Gabriel Solomon, Senior Vice President of Public Policy of the GSMA, speaking at the Commonwealth Telecommunications Organisation’s Connecting Rural Communities Asia Forum. “Globally, 75% of the cash in Universal Service Funds is unspent*. We strongly support the call by Nirpendra Misra, the Chairman of the Telecom Regulatory Authority of India, to cut the 5% levy by at least half and remove handset taxes as that would make mobile phones more affordable for rural consumers and spur industry investment in currently un-served areas.”

The extension of mobile coverage into rural areas can also be fuelled by infrastructure sharing agreements between mobile operators, which can make new base stations more cost-effective, according to a new GSMA report entitled: “Mobile Infrastructure Sharing”**. The report recommends that regulators should encourage the growing global trend among mobile operators to share more infrastructure, but should not mandate sharing, as doing so may curb competition and distort the market.

In India, the regulator has just increased the scope for infrastructure sharing in response to proposals from mobile operators. “Up to 40% of all new cell sites and masts are shared today and this will grow substantially,” said TV Ramachandran, Director General of the Cellular Operators Association of India. Indus Towers, Reliance’s RTIL and Bharti Infratel share more than 130,000 sites. “The vast majority of the sharing agreements will continue to be driven by market forces,” added Mr. Ramachandran.

“Infrastructure sharing is a potentially powerful tool mobile operators can use to cost-effectively extend mobile services, including broadband connections, to many millions of people,” added Mr. Solomon. “We congratulate the Indian government for its lead in granting operator requests to share the radio access network, along with sites and masts, and we call upon other regulatory authorities to follow the Indian example.”

* A GSMA report “Universal Access – how mobile can bring communications to all”www.gsmworld.com/universalaccess found that 15 of the 32 universal service funds have collected more than US$6 billion and spent $1.6 billion with only 7% of that going on mobile solutions.

** The report is available for download at www.gsmworld.com/sharing

About the GSMA:

The GSM Association (GSMA) is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association’s members serve more than 2.5 billion customers – 85% of the world’s mobile phone users.

For more information please contact:

Mark Smith or David Pringle
GSMA
Email: press@gsm.org