“The biggest contribution from research is not what is adopted, but what is adopted,” says Bill Melody, founding director of World Dialog on Regulation for Network Economies.

“Harmful policies that are avoided with the information generated from research.”

R K Arnold the head of the executive secretariat of the Telecom Regulatory Authority of India says all its recommendation is based on extensive but decisions are not

“We used a (LirneAsia) research on a tax and the government reduced the tax. In infrastructure sharing we drawn heavily on your research,” Arnold said.

“But whether the decision makers use it at the top depends on a very fluid situation.”

In many countries government were heavily taxing telecom services. LirneAsia itself intervened in Sri Lanka to stop a levy from hurting the poorest users.

IDRC, a body that is funding research bodies says evidence has to be pushed to decision makers for people to benefit.

“Research can play a very critical role in specificity and timing,” says Stephen McGurk, IDRC India.

“To be heard requires persistence and timing.”

A previous version of this article was selected for presentation at the CPRsouth 3 conference in Beijing in December 2008.

The abstract is given below:

Fast growing telecom markets, especially in the developing world, are attracting new types of users, especially those at the Bottom of the Pyramid (BOP). Innovative pricing is needed to respond to this increasingly heterogeneous demand. However, many regulators still claim to regulate prices using methods from the monopoly era, despite lacking capacity to effectively regulate proliferating tariff plans. What actually happens is that tariffs are “approved” for the most part without proper review.

One response has been asymmetric regulation/forbearance, wherein the regulator determines that certain operators do not have significant market power (SMP) and frees them from regulatory burdens, including, in many cases tariff regulation. This still leaves a few operators (possibly one each in different markets such as fixed, mobile, and broadband) under tariff regulation. They are required to file tariffs, and if not go through formal proceedings, at least go through a staff review. Given the leakiness of most regulatory agencies, this puts them at a significant disadvantage because their competitors can prepare precisely targeted and timed responses, unencumbered by regulation.

Forbearance was included in the 1997 legislation that created the Telecom Regulatory Authority of India (TRAI) (prior to the EU asymmetrical regulation model being fully developed). Possibly as a result, TRAI did not forbear from tariff regulation on the basis of SMP: all tariffs in urban areas were forborne, with some limited regulatory authority retained in rural areas. The results were some of the lowest tariffs in the world (Samarajiva, 2008).

Based on this lesson, it is proposed that “banded forbearance” be introduced, even in countries with far fewer competitors than in Indian circles (licensing areas). In this form of benchmark regulation, the regulator will: define a benchmarking methodology such as an adaptation of the OECD basket methodology, including peer countries and weights; define a band of allowed variance above and below, what is likely to be a moving benchmark, within which prices will be fully forborne; and specify competition-related criteria that will be used to evaluate price movements below the lower band (e.g., limited to tests on predation and price squeeze). Time limits and default outcomes can also be specified.

The introduction of bands and specified criteria will allow operators to use innovative marketing strategies, while retaining safeguards that may be important in markets with few competitors and possibly significant control over essential facilities by incumbents. It will also result in refocusing regulatory energies on creating the conditions for competition rather than sterile calculations of the X in RPI-X. The production and timely dissemination of standard price, minutes-of-use, and call-distribution data needed for OECD type benchmarking will also result in reducing the opacity of pricing for consumers, thus sharpening competitive pressures and improving the customer experience.

IJRG is a relatively new (2000 on) international journal based in New Delhi. We encourage authors to submit articles to IJRG and those working on regulation topics to subscribe.

Over seventy key experts of the telecom industry participated at the event, with aim of understanding and sharing the key challenges in the Indian policy and regulatory environment and the solutions available. Delivering the keynote address, RN Prabhakar, member, Telecom Regulatory Authority of India explained the challenges faced by a regulator during the course of development.

The event saw the release of the TRE survey, jointly presented by Rohan Samarajiva and Payal Malik. A panel discussion on ‘Challenging Policy and Regulatory Environment,’ was also held. 

The full article is available here.

The results of the 2008 TRE research were presented at a well attended event in New Delhi on 6 March 2009. The picture above shows Mr R.N. Prabhakar, Member of the Telecom Regulatory Authority of India responding to points raised in the discussion. In the background are members of the panel, including LIRNEasia Chair and CEO Rohan Samarajiva.

Senior Research Fellow Payal Malik presented the TRE results for India:

The details of the findings may be seen at V&D.

What did we learn?

1. Broadband users in Colombo should not complain. They do have excellent choices. In terms of actual speed they are better off than counterparts in Dhaka, Chennai and New Delhi. Hold on, there is a hitch. They rarely get what is being promised; operators seem to over promise and under deliver.
2. Indian operators, as seen from test results from Chennai and New Delhi, while not promising sun and moon, deliver what they do and sometimes even more. That is what we call ‘Ethical Advertising’. Indian Telecom Regulator’s intervention can hardly be overlooked. In January 2008 Telecom Regulatory Authority of India (TRAI) directed the operators to specify the minimum speeds and to keep that promise. Looks like it is working.
3. Dhaka: Prices seems to have dropped but so does the quality. So after all it is not such great news.

That is not all, there is an interesting piece of information useful for any mobile broadband user in Colombo, but we leave the readers to find it themselves. The full report is here.

In addition we received some publicity from Indian online media. Good to know people start taking notes.

More on LIRNEasia’s Rapid Response program here.

Read all comments TRAI received from stakeholders on Consultation Paper on “Bandwidth Required for ISPs for better Connectivity and Improved Quality of Service” here.

TRAI has set the ball rolling to revise IUC, particularly termination charge from Rs0.3/minute to Rs0.1/minute and carriage charge from Rs0.65/minute to as low as Rs0.16/minute.

IUC is payable by one telecom operator to others for use of their networks either for origination, termination or carriage of a call. Inter-operator calls constitute a major part of the total calls handled by the telecom network. These charges are important as they can transfer network costs between operators.

Although reduction in these charges would lead to a lower tariff for customers, as benefits would be passed on due to intense competition, it would dent the profitability of telecom operators mainly Bharti Airtel, Reliance Communications and Idea Cellular.

Read the full story here.

The significant achievement was made possible by the mobile telephony segment of communications, which was once thought to be a gizmo for the rich – what with a tariff of Rs.16.80 per call when the telecom revolution began in the country in the early 1990s. But with tariff falling to 40 paise a call and incoming calls becoming free, mobile telephony began to appeal to the masses.

In fact, 2008 also saw Indian telecom operators add a whopping 8-10 million new subscribers to the network each month, making a host of global companies to look at the country as their next big market for growth, especially in the hinterland.

And the statistics speak for themselves.

As per the watchdog for the sector, the Telecom Regulatory Authority of India (TRAI), the total number of telephone connections in the country reached 363.95 million at the end of October 2008 against 256.55 million in the corresponding month last year.

Read the full article in sify.com here.

Leading mobile firm Bharti Airtel signed up 2.7 million customers, enough for it to overtake state-run Bharat Sanchar Nigam Ltd as India’s largest telecom firm by total subscribers, including fixed-line subscribers.

Second-ranked mobile firm Reliance Communications added 1.75 million customers, and No. 3 Vodafone Essar, controlled by Britain’s Vodafone Plc, added 1.76 million.

India is the world’s fastest-growing market for wireless services and the second-largest market for such services after China, with growth fuelled by cheap handsets and call rates as low as 1 U.S. cent a minute.

See the full story in Reuters here.

Industry analysts say person using Internet telephony to make calls would see his call charges falling by as much as 50-60 per cent compared to a normal telephone call today. This will benefit an ordinary home user as well as corporates and other industries alike. Internet telephony would help telecom penetration in rural India.

Till now Internet telephony was allowed only between personal computers or to mobile or landlines abroad. But complete Internet telephony would mean that calls can also be made to landlines and mobiles in India as well as abroad. To start using Internet telephony, just an adapter is needed that converts a regular landline with broadband connection to a net phone.

Read the full story in ‘The Hindu’ here.

August has been a busy month for the Telecom Regulatory Authority of India (Trai) and its chairman, the redoubtable Nripendra Misra, a dyed-in-wool bureaucrat who has in his regulatory avatar done arguably more than any of his predecessors on the job. He has plenty of support and equally bitter critics who wish he would give up on forbearance, cut rentals, mandate cheaper roaming and ensure per second billing instead of per minute.

On August 20, the authority allowed India’s estimated 295 million telecom subscribers the freedom to use different long distance service providers without changing their service provider. Two days earlier, it had unshackled internet telephony (voice transmitted over internet protocol networks). Two weeks before that, it had opened the doors for virtual mobile networks, virgin territory in India till then.

Read the full article in Business Standard here.

The charges are paid by the operator, from whose network the call is made, to the operator on whose network the call terminates.

The DoT has asked TRAI to review these charges on a priority basis so that consumers benefit at the earliest. “Given that the central aim of the telecom policy is to provide services at affordable rates, it is suggested that a review of mobile termination charges, based on present and projected costs and traffic, be undertaken by TRAI in a time-bound manner,” the DoT said in a letter to the regulator.

In 2003, Trai had recommended a termination charge of 30 paise per minute. However, the DoT has now reasoned that growth in the number of users, rise in the minutes per usage and declining tariffs will bring operators ample sources of revenue.

Read the full story in ‘Business Standard’ here.

“The differential and higher charges levied by cellular service providers for calls to fixed lines do not have adequate justification. This can be viewed as an attempt to promote substitution of fixed line traffic by mobile traffic and may lead to forced substitution of fixed lines by mobiles, thereby reducing the target market for fixed line broadband,” senior TRAI officials said.

Read the full story in ‘The Hindu – Business Line’ here.

TRAI has suggested that the choice of broadcasting technology should be left to the service providers but should be recognised by an authorised body.

There are broadly two routes for providing mobile television services. One is operated by using the telecom network with spectrum already allotted to Unified Access Service License (UASL) and Cellular Mobile Telephone Service (CMTS) licensees, and the other using broadcasting method using separate spectrum.

According to TRAI, telecom operators with CMTS or UASL licenses will not require any further licence or permission for offering mobile television services on their own network using the frequency or spectrum already allotted to them.

Read the full story in ‘The Hindustan Times’ here.

Telecom operators, having the Unified Access Services License (UASL) or the Cellular Mobile Telephony Service (CMTS) License, will not require any further licence or permission for offering mobile TV services on their own network using spectrum already allotted to them. However, a new class of operators for using the broadcast method needs to be created, it said.

Read the full story in ‘The Hindu’ here