I am delighted to be a part of COAI and in fact it is a privilege to be the Director General of such a prominent industry association in India. I am also thrilled to come back and serve the Indian telecom industry at a time when it is making record progress and there is no stopping now. It is a great opportunity to contribute to a market that is looked up to by other developing countries.
I fondly reminisce about my association with the Indian telecom industry earlier and that was a particularly challenging time when TRAI had just started up and DoT was the policy maker, operator and regulator all rolled into one and the process of getting clearance for cell sites could take up to an year. However, now, the scenario has drastically changed. It gives me great pleasure to see that a struggling industry then has now transformed intothe 2nd largest wireless network and has made an indelible mark in the global arena.
I can clearly see that the time ahead is going to be full of exciting opportunities. My endeavour would be to work towards the common goals of the industry and make sure that COAI as an institution continues to grow and flourish. For me personally, the journey with COAI will be one of tremendous growth and learning. I have already started focusing on a wide gamut of industry issues that we had to deal with at COAI. My responsibility will be to integrate the new entrants with the more mature players and also to balance the interests of different operators and to try and do what is right for the industry as a whole.I am also looking forward to interacting with a cross section of professionals across the entire range of the business spectrum, both from within India as also globally.
However, at the same time there will also be several challenging issues for which we need to take steps in the right direction for their effective resolution. The arrival of 3G & BWA, rollout of broadband in a truly comprehensive way and promoting the expansion of services in rural India amidst the lack of basic infrastructure in these areas will be a significant challenge. Another challenging area is that of sustaining business with such low ARPUs and simultaneously meeting the security requirements of the nation. It is amazing that the industry is able to maintain such a fine balance in this area and I would want to take it forward as national security is of paramount importance for all of us. I am sure with the cooperation of all the members of COAI we can move forward together and meet these challenges effectively and build on the good work already done by my colleagues in the earlier years. All we need to have is the courage of our conviction and the resolve to work together and that I believe will be enough to carry us forward towards success.
My immediate focus areas for the coming year are:
Rural Connectivity: It is expected that the next phase of growth will come from the rural India. There is a lot of potential in rural areas, which the operators are already exploiting. However, the aim should be to bring the teledensity level of rural areas at par with the urban areas. Only when mobile connectivity reaches the unconnected, will its benefits start to flow for them.
Mobile Broadband Penetration: The 3G and BWA auctions have been concluded recently and the operators would soon be rolling out services. Operators have paid exorbitant amounts to gain the spectrum for 3G and BWA and now utilizing this spectrum to spread additional services to the masses at equally affordable prices as mobile telephony, will be a challenge for them. However, to make India an information society, all of us will have to work towards providing such services as e-governance, e-education, e-health, mobile banking, etc. to the relevant sections of the society.
Lowering of Levies and Duties: It is sad to see that the industry which is contributing so much towards the socio economic development of the country is burdened with such high levies and duties. It is very important that telecom is seen as an essential service and the levels of levies and duties on the industry are significantly brought down. No longer should the mobile industry be viewed as an endless source of revenue to fix Government budget deficits but an essential national service that is to be nurtured so it can continue to contribute to economic development.
Enhanced Industry Profitability: The recent price wars in the voice segment of our business, the commoditization of voice services, increasing levies and taxes, mindless competition, some uneven regulatory policies have all contributed to the deteriorating profitability of our industry. A “sick industry”, wasted of its financial health, cannot be an engine for national development! I hope we can move towards a competitive environment which caters to the needs of our customers, contributes to national development and provides a fair return on investments. I trust we have the talent and resources to ensure these are not mutually exclusive goals.
Development of an Enlightened regulatory Environment:much of “Convergence”. This has led to an increasing need for multiple branches of Government to converge in developing regulatory policy – e.g., we have seen the IT, Broadcasting, telecommunications, Finance and Home ministries involved at some time, either individually or together, in mobility issues. This clearly calls for a new paradigm for Regulation. No longer is it appropriate to have piece meal regulatory policy but a comprehensive regulatory structure that allows and fosters the dynamic forces of technology and the market place to drive innovation, value customer choice, economic development, investor confidence and national priorities.
The journey so far (3 months) at COAI has been very exhilarating. COAI, along with its members has extended a warm welcome to me and I assure them of my fullest co-operation and support in all the matters of the Association.
I am delighted to present the Annual Report for the year 2009-2010.
INTRODUCTION
The importance of mobile in everyone’s life has undergone a paradigm shift. Telecom has evolved as a basic infrastructure like electricity, roads, water etc. and has also emerged as one of the critical components of economic growth required for overall socio economic development of the country.
The year 2009-10 has been the year of Broadband with the much awaited 3G & BWA auctions taking place. We now expect that a similar growth as of mobile will be replicated for mobile broadband too in the years to come. With a clear path of 3G, HSPA, LTE and LTE-Advanced, we expect the GSM family to be the prime driver of mobile broadband penetration in India.
PERFORMANCE INDICATORS
The GSM industry continued to be on the track for growth and the GSM base as of March 2010 was nearly 422 million with the addition of nearly 10-12 million subscribers per month. The GSM industry in India today offers low tariffs, high Minutes of Usage (411) and low Average Revenue Per User (Rs.144).
The GSM service providers are also focusing on rural areas and are extensively rolling out services in rural and remote areas. By March 2010, private GSM operators were providing services to over 130 million subscribers in rural areas and this number is increasing by 3-4 million additions every month.
With the vision to expand GSM services to more and more people of the country, the operators who obtained licenses in 2008 are also starting to provide GSM services.
The Industry continued to invest aggressively in the sector and the overall investments by private GSM operators have resulted in 1,185 MSCs, 4,566 BSCs, 370,685 BTSs, and a backbone network of more than 590,078 kms spread across the country.
INDUSTRY INITIATIVES
As in the previous years, COAI and its members continued to work on innovative projects and applications for the benefit of the GSM subscribers. In fact, depending on the demands of the industry many new projects were also taken up by COAI this year and the entire industry is working on these to make them successful and benefit all.
Under the aegis of the Apex Advisory Council for Telecom in India (ACT), COAI organized regional workshops for all four regions of the country which witnessed healthy interaction amongst all the Workshop participants, from DoT Headquarters, TERM Cells, Security as well as Law Enforcement Agencies. As an outcome of the various workshops, DoT issued some favourable guidelines for the industry clarifying many pending issues including outstation customers, foreign nationals, etc. Through its continuous efforts with the Government, ACT was able to get an additional list of documents to be accepted as Proof of Identity and Proof of Address, which have been really helpful for the industry in terms of expanding growth to rural and remote areas. We believe that these initiatives have saved our members several lakhs in fines. We expect to continue with these initiatives to further reduce penalties and costs.
Last year a crucial issue of suspension of prepaid services in Jammu & Kashmir came up. ACT expended significant efforts with DoT and MHA and held various meetings with them to highlight the inconvenience caused to the citizens of the state. After deliberations with the MHA, the services were finally resumed with a new set of guidelines to be followed by the operators. In its endeavour to continuously improve its systems and procedures, under the aegis of ACT, the entire industry formulated a Common Manual on Prepaid Subscriber Verification, which is uniformly being followed by the entire industry.
COAI has also been closely working with the DoT/TEC, GSMA for adoption of safety standards for EMF exposure from Mobile Base stations. COAI worked closely with TEC on Test Procedures for measurement of Electromagnetic Fields from Base station Antenna and engaged experts from a renowned engineering college (Thiagarajan Engineering College Madurai) to share their expertise on the test procedures. TEC issued the Test Procedure for measurement of Electromagnetic field from Base Station Antenna in September 2009.
COAI has also been continuously interacting with media, various Government departments and agencies with a purpose to erase the misconception about the EMF, and its alleged health effects, and has also been disseminating factual information on RF radiations from Mobile stations and mobile phones based on scientific evidence and the large studies & research carried out by the International bodies of highest repute, e.g WHO, ICNIRP , ITU , & FDA etc.
The year 2009-10 also observed many tower related issues in various states of the country. There have been increasing incidences of State governments, local civic or municipal bodies laying down impossible stringent criteria for the installation of towers. Such restrictions/prohibitions result in the creation of ‘dark spots’, resulting in poor quality of service to the subscribers of cellular mobile service. Under the Infrastructure Committee, COAI along with AUSPI took up the job of working toward resolution of these issues with the various state Governments, especially the tower matters in, NOIDA, Delhi, West Bengal, etc. Issues in West Bengal have been smoothly resolved whereas the other matters are still being dealt with.
COAI members at various occasions expressed a need for a continuous advocacy programme by the association to negate the apprehensions associated with the cellular towers from the minds of general public/ government agencies / civic bodies and media.Accordingly an advocacy group was setup to discuss and strategize the road map for the advocacy programme on EMF and Infrastructure related issues. It is a joint Industry initiative in which AUSPI and the associate members of COAI are also actively involved. The advocacy group is working towards effectively engaging with the target audience to create awareness and build positive opinion on concerns related to EMF exposure from the base stations.
COAI continued to work on an inter-operator UCC complaints resolution portal to ensure speedy resolution and settlement of inter-operators UCC complaints. The portal includes the option of uploading both inter operator and intra operator complaints. The portal also includes the automated process of generating various MIS reports which includes the monthly report to be submitted to TRAI by each operator; this saves the efforts of the operators in compiling the data and preparing the report. COAI is also working on making this portal work post the MNP scenario.
COAI has always held the view that the use of the mobile phone as a tool for mobile banking / mobile commerce has immense potential and implementation of this initiative can single handedly ensure financial inclusion for a large segment of India’s un-banked population. Last year an inter-ministerial committee was constituted to examine various issues related to Mobile Banking in India. The major focus of the committee is to examine the role of the Mobile service providers in contributing to the spread of mobile banking in India. COAI prepared a White Paper on “Role of Mobile Service Providers in enabling Financial Inclusion”, which was submitted to DoT.
With the aim of providing the facility of vernacular language SMS to the citizens of India, COAI joined hands with CEWiT (Centre of Excellence in Wireless technology) in the development of vernacular language SMS. The proposal has been cleared by 3GPP and now its implementation at national level is being analyzed. Last year along with CEWiT, COAI also organized a workshop for the concerned stakeholders to understand the working of this proposal and discuss the details of its implementation.
The TCOEs (Telecom Centres of Excellence) initiative, where COAI is playing a key role, is taking Indian telecom to the next level of success. TCOE India has been accepted as one of the 12 evaluating groups by ITU-R for the Radio Interface Technology Candidates for IMT-A standards (4G technologies). The TCOE is also working towards development of Telecom Entrepreneurship Development Centre (TEDC) with special focus on rural telecom and is also developing Telecom Standards Development Organization of India, which envisages formulating Telecom standards best suited to India’s operating conditions and needs as well as to promote Indian service providers’ requirements and Indian IPRs into International standards.
STATUS ON POLICY AND REGULATORY ISSUES
COAI believes that due to its efforts with the Regulator and the licensor, today, Indian Mobile Telecommunications has been able to come a long way from older times and is considered a poster boy of Reforms and Liberalization. The regulatory and policy initiatives that have taken place in the last year are given below:
A big challenge that has come up for the industry due to a policy decision of DoT is the import of telecom equipments and softwares. Last year in December, DoT amended the licenses by stating that service providers require security clearance of equipments/. Software before procurement. Since then the industry has been trying very hard to get the matter resolved as no imports have taken place since December due to very stringent conditions being imposed on the service providers. Recently, COAI is working to finalize an agreement between the licensees and vendors along with AUSPI and DoT which would over-ride all other Orders/ Circulars of DoT and would facilitate the procurements of telecom equipments/ softwares.
As I have already stated, that the much awaited 3G & BWA auctions have been completed recently. This will bring in the much needed broadband connectivity to the citizens of the country. These will also serve as valuable tools to provide cost-effective mobile broadband coverage in rural areas, while simultaneously alleviating future capacity constraints in densely populated urban areas and provide benefits of broadband to the rural areas. We hope that the citizens of the country would be able to avail the benefits of mobile broadband towards the end of the latter part of the year.
One of the major policy initiative on which COAI is working closely with TRAI, DoT and TEC is the smooth implementation of Mobile Number Portability (MNP) in India. COAI has been taking up the concerns of all the service providers with various agencies. DoT has been convening review meetings every week with the MNP stakeholders (i.e. TSP’s and MNPOs) to review the progress on MNP testing and assess the status of readiness of all the operators i.e. both mobile operators and the MNPOs.
The telecom sector is also burdened by High Cost Structure. Levies and duties are the highest as compared to global benchmarks. There is a need to rationalize the cost structure of the sector so that affordability of services can be improved further which will not only serve to increase take up but also improve usage. COAI has been providing its inputs on Goods and Service Tax (GST) an d the Direct Tax Code (DTC)
At this stage, there is also a dire need for Spectrum Reforms in the country. The Spectrum Committee last had come out with its recommendations and the Regulator after examining had made recommendations to the Government. However, the recommendations of TRAI are at a major deviation from the earlier DoT Spectrum Committee report. The DoT spectrum committee had a panel of experts which had held detailed deliberations on the issue of spectrum management and this expert body had come out with a more balanced view on the subject, keeping in mind not only the past legacy but also the future growth of the sector.
With lowest tariffs and one of the lowest ARPUs, the profitability of the business models of operators were already being challenged and these recommendations will have a severe negative impact on all future investments which were to be made for expansion of service to rural areas. These recommendations will make it extremely difficult for the operators to provide affordable mobile communication to the citizens of India and hence will be against the interest of the consumers.
Hence, the need for positive spectrum reforms still remains. A holistic and comprehensive view needs to be taken, keeping in mind the interest of all the stakeholders and suitable policy framework for spectrum should be developed. Looking at the exponential growth of mobile service, there is also a need to allot more bands like 700 MHz band for mobile/ mobile broadband services in the near future.
I am sure that the resolution of the above issues will lead to multi-fold growth of the telecom industry and will make it a sustainable business for all the operators.
OTHER ACTIVITIES OF THE ASSOCIATION
COAI continued its endeavor to be at the forefront of national and international events held in the year 2009-10. COAI was an active member of the contingent to 3GSM World Congress 2009 and 2010, both held in the months of February at Barcelona. COAI also organized various Seminars and Workshops on issues of interest and benefits for its members and the industry. The issues included Mobile Broadband including exploring opportunities in 700 MHz band, EMF Radiations, LTE, etc. COAI and its members also actively participated in the Organization as well as the activities of many other telecom events in India. COAI was closely associated and played an important role in the organization of the India Telecom Summit – 2009, a reputed international conference and exhibition.
This year on the request of some members a sub committee was set up to review the COAI Rules & Regulations.The primary purpose of setting up the subcommittee was to examine the voting rights, and consider inputs from the members on the desired changes / modifications in the COAI Rules & Regulations. The Committee will broadly make recommendations on considering creating a founder member category, sharing of costs by all members, review of COAI subscription formula and review of COAI voting rights.
This year COAI was actively involved in expanding its horizon by joining hands with many national and international organizations. COAI became the Market Representative Partner in 3GPP, so far there were no representatives of 3GPP in India. COAI also believed that India being the 2nd largest wireless market in the world should play a major role in the formation of telecom standards. With this view it joined the national forum GISFI (Global ICT Standardization Forum for India) and at an international level joined WWRF (Wireless World Research Forum).COAI also signed an MoU with Israel Mobile & Communications Association (IMA) to confirm the common goal of COAI and IMA to maintain and promote cooperation and understanding in the development of trade and business relations in the field of Cellular Telephony.
The COAI Executive Council headed by Chairperson, Ms. Suneeta Reddy, Vice Chairman, Mr. Sanjay Kapoor and comprising senior representatives from all member operators, met quite a few times over the last year to deliberate on a variety of issues impacting the GSM industry. They were adeptly assisted by expert advice from the various Working Committees that had been set up in COAI.
Many special committees and working groups formed in COAI also discussed various issues related to certain specific projects like Subscriber Verification and Security related Issues, National Do Not Call Registry, Infrastructure Sharing Committee, etc. and continued to work diligently on the related issues.
Last year COAI also bid farewell to their beloved Director General, MR. T. V. Ramachandran who had been a pioneer in setting up the Association and taking it forward to a level of international recognition.
Believing in the philosophy of Oliver Wendell Holmes Sr., a physician and a Professor at Harvard, who said, “the great thing in the world is not so much where we stand, as in what direction we are moving”, COAI, even in the absence of Mr. T.V. Ramachandran and other senior colleagues moved forward in its endeavour of making available affordable communication to the people of the country and working towards taking the GSM industry to new levels of success. Thus, instead of resting on our past laurels, we are constantly moving ahead towards providing affordable mobile services to the entire country. At this juncture I would like to appreciate Mr. T.R. Dua, Deputy Director General’s efforts in bearing the flag of the Association in the interim period and taking it forward with the same momentum as earlier.
COAI has very warmly welcomed me into the family and they believe that the Association would greatly benefit from my experiences and my contribution towards the industry will help us in achieving newer heights.
In the end, I would like to thank all the Committees and Working Groups and their Chairmen and Vice Chairmen for their proficient leadership and sincere contribution towards various industry issues, even during the transition phase of COAI.
I would like to personally thank the Chairperson, Ms. Suneeta Reddy, for her fine headship of the Association and her vigor in binding the Association for a smooth transition and would request for her continued participation and support in all the future efforts of the industry. I also thank the Vice Chairman, Mr. Sanjay Kapoor for all the support and guidance that he has provided during his tenure.
Last, but not the least, I would like to express my deep gratitude to the COAI Secretariat team which has extended exceptional support and assistance in all our endeavours during all times in the previous year. It was due to their belief in the values of the Association that we were able to swiftly pass through the transition phase.
