Draft Indian Telecommunication Bill 2022

Draft Indian Telecommunication Bill 2022

• To control Internet-based OTT (Over-The-Top) telecom services, the Department of Telecommunications (DoT) recently announced the draught Indian Telecommunications 2022 Bill.

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What are the Draft Bill's Main Points?

• The Indian Telegraph Act, 1885, Indian Wireless Telegraphy Act, 1933, and The Telegraph Wires (Unlawful Protection) Act, 1950 are the three independent laws that now regulate the telecommunications industry. The proposed Bill consolidates these laws.
• Dilution of TRAI Authority: The DoT has also suggested to reduce the Telecom Regulatory Authority of India's (TRAI) authority when it comes to giving new licences to service providers.

Regulation of OTT:

• Internet-based and over-the-top (OTT) communication services including WhatsApp calls, Facetime, Google Meet, and others have been categorised as telecom services by the government.
• It was a long-standing demand of the telecom industry to level the playing field. OTT platforms do not currently require a licence to provide services, but telecom firms must.
• Additionally, OTTs and internet-based communications would need a licence to provide services if they were included in the scope of telecom services.
• Return Provision: The telecom ministry has put out a provision that would refund payments in the event that a telecom or internet provider gave up his licence.
• Payment Default by Licensees: In the event of payment default and under extraordinary circumstances, such as financial strain, consumer interest, preserving market competition, or reliability and continued supply of telecommunication services, the government may postpone payment of such amounts, convert part or all of the amounts due into shares, write off the outstanding balance, or grant relief from payment.
• In the event of bankruptcy: The Central Government may take any additional actions that may be required, including permitting the licensee or assignee to continue using the spectrum, in the event that the organisation to which the spectrum has been assigned becomes insolvent.
• The Universal Service Obligation Fund (USOF) would be renamed the Telecommunication Development Fund in this proposal (TDF).
• The USO fund is produced by the telecom service providers' yearly revenue. The Consolidated Fund of India will first receive credit for any funds received for the TDF.
• The money will be used to improve connection in underserved urban, rural, and remote locations. Additionally, it will promote the introduction of new communications services and help with skill development and research into new telecommunication services.

What is the current state of the Indian telecom industry?

Current Situation:

• With 1.17 billion subscribers as of 2022, India has the second-largest telecom industry globally. The overall teledensity in India is 85.11%.
• The industry's rapid expansion over the past few years has been primarily fueled by low prices, increased accessibility, the introduction of Mobile Number Portability (MNP), expanding 3G and 4G coverage, and changing subscriber usage patterns.
• The third-largest industry in terms of foreign direct investment (FDI) inflows, the telecom sector supports 2.2 million jobs directly and 1.8 million jobs indirectly.
• The amount of FDI entering the telecom sector between 2014 and 2021 increased by 150% to USD 20.72 billion from USD 8.32 billion between 2002 and 2014.
• In the telecom industry, 100% Foreign Direct Investment (FDI) is currently permitted via the automatic method.
• India is predicted to have 920 million unique mobile customers by 2025, including 88 million 5G connections, making it the second-largest smartphone market in the world behind the United States. India now has about 1 billion installed smartphones.

Initiatives:

• Production Linked Incentive (PLI) Scheme worth INR 12,195 Crores for the production of telecom and networking equipment is one of the PLI Programs under the Atmanirbhar Bharat Abhiyan. More than INR 4,000 Crores worth of incentives have been set aside for the Design Led Manufacturing Scheme of the current PLI Scheme.
• Large-scale structural and procedural reforms have been implemented in 2021 to improve liquidity and reduce financial stress within the telecom sector.
• The Bharat Net Project has installed optical fiber lines to 178,247-Gram Panchayats, of which 161,870 are operational. In addition, 4,218 Gram Panchayats have been linked through satellite, bringing the total number of Gram Panchayats that are ready for service to 166,088.
• Prime Minister Wi-Fi Access Network Interface (PM-WANI): Public Wi-Fi service is made available through Public Data Offices (PDOs) dispersed around the nation to hasten the growth of broadband internet services.

Challenges:

• Declining Average Revenue Per User (ARPU): The Indian telecom industry is looking at consolidation as the only way to increase revenues because ARPU drop is now sharp and persistent, accompanied with declining profits and occasionally serious losses.
• The Supreme Court's decision to grant the government's request in 2019 to collect an adjusted gross income of roughly Rs 92,000 crore from telcos has added to their concern.
• Limited availability of the spectrum Compared to China and European countries, the amount of spectrum available is less than 40% and 50%, respectively.
• Low Broadband Penetration: The country's low broadband penetration is a cause for concern. According to a white paper on broadband given at the most recent International Telecommunication Union (ITU), only 7% of Indians have access to the internet
• Applications that are over the top (OTT), such as WhatsApp, OLA, and others, do not require a telecoms company's consent or a contract. The revenue of telecom service providers is hampered as a result.
• Huge shifts in the demands placed on the telecom equipment that help connect the entire system from the main server to the user.

Way ahead

• In order to leverage new features and techniques to provide clients with better and feature-rich service, the telecom industry in India must overcome a number of obstacles, such as preserving a sufficient amount of spectrum and accelerating the adoption of new technology.
• The Draft Telecommunication Bill 2022 addressed these issues and is available for comment, which would help develop a comprehensive strategy for India's future in the field of telecommunications.