For a Level Playing Field in 4G Telecom
Policy must not privilege any operator
Policy and regulation in Indian telecom have evolved in response to competition in the business and its articulation in the equally competitive polity. The regulatory framework needs to evolve further, at this juncture, on the eve of the launch of fast mobile broadband, dubbed fourth-generation communications, or 4G. The big disruption in Indian telecom is expected to come from Reliance Jio, promoted by Mukesh Ambani, who first democratised mobile telecom in the country with a 500-per-month offer a decade and a half ago. This offer forced all other service providers also to adopt the selfsame low-margin, high-volume business model, driving tariffs down further. We hope Jio will work another transformative change in data speeds and costs.
However, Jio must work its magic without any special privileges. One relates to the spectrum usage charge (USC). Jio originally got spectrum as a broadband provider and so has to pay1% of revenue as USC. That continues even after securing the right to offer calling services. Calling service providers pay 5-7% of their revenue as USC. High revenue shares made sense when spectrum was bundled along with the licence, without any specific upfront payment for it. Now that most spectrum in use is the kind that companies buy in competitive auctions and pay for upfront, there is no case for high USC. It should be brought down to 1% for all service providers.
Another source of discomfort is the telecom regulator’s reluctance to define an intranet, exempt from net neutrality rules that apply to the public internet. Many worry that some operator might circumvent net neutrality rules by treating connections to its servers through which subscribers access services hosted on them without going through the public internet as an intranet. A simple solution is to define a company’s intranet as the closed user group of those who receive payments from the company for the services they render it. Subscribers, for whom services flow from the company and payments towards it, will necessarily figure outside an intranet.