Indian Telecom Industry in 2014; hits and misses

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india-telecom20142014 has been a significant year for the Indian Telecom market and it has given reasons both to rejoice and despair to the different stakeholders in the industry. We take a look at how the year was for the customers and the operators and how different regulations have impacted the industry.

Reasons for Customers to Rejoice:

4G Launch: Airtel launched 4G services thus putting India on the 4G map. Though the services are not available in all cities, Airtel is slowing expanding. Recently Airtel even reduced the prices of 4G to match that of 3G which analysts said could be due to expected launch of RJio.

Clarity on MNP: Government has set a deadline of May 2015 by when the operators need to implement full mobile number portability. This will bring a lot of relief to the customers who would be saved from the hassle of changing numbers whenever they change locations.

Defining download speeds: In another move, TRAI has mandated a minimum download speed of 1 Mbps for 3G and 56Kbps for 2G services. This has helped to keep the minimum speeds in check, a reason for customers to be happy.

VAS Activation: TRAI has cracked down on the operators for unlawful activation of VAS and has directed operators to seek consumer consent before activation of VAS.

Reasons for customers to despair:

Tariff rise: Various operators increased the tariffs for data without intimating the post-paid customers. For pre-paid customers, operators either increased the prices directly or reduced the validity of plans resulting in indirect increase in the price. Voice tariffs were also increased.

Loop mobile closure: Due to the slow death of Loop mobile, customers were left in soup with no clarity or sufficient support to get their numbers ported. This could have been avoided had DoT acted smartly as per the need of the hour.

Paid OTT APPs: Operators have tried to retaliate against the increasing popularity of VoIP and messaging apps, which have been eating into their revenues. Operators are seeking regulator’s help in keeping OTT services in check. It might lead to apps becoming paid which is not favourable for the customers.

Reasons for operators to Rejoice:

Govt’s aid to BSNL: Government has been actively thinking how it can help revive the state telecom players BSNL and MTNL. It has announced its plans to infuse investments to the tune of INR 39K crore. Reviving BSNL and MTNL is a good move but will the investment be enough? Government will have to decide a set of right measures for a successful revival plan.

3G ICRA: TDSAT ruled in favour of operators and quashed the penalties imposed by DoT on operators for entering into Intra Circle Roaming Agreements (ICRA). ICRA has helped operators launch 3G services in circles where they did not hold spectrum without having to pay the spectrum charges.

Reasons for operators to Despair:

e-GSM Band: DoT rejected creation of e-GSM band in 800MHz which would have added additional 10MHz in 900MHz band. While this move has brought relief to CDMA operators, GSM operators were left high and dry.

Reserve Price-800MHz: MTS has expressed its unhappiness over the reserve price set for the 800MHz band. The operator finds the price not in sync with the business and ecosystem realities.

Spectrum Auction: Right from the prices of the spectrum which was auctioned, to the delay in allocation of the spectrum by DoT has left the operators unhappy. The delay in allocation might cause service disruption leaving customers in soup.

While 2014 was a mixed year with key milestones, we anticipate 2015 would be consequential and would help redefine the telecom market in India.

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