Trai Suggests Unbundling of Infrastructure to Ease Situation of Telcos

The telecom companies have been under immense financial pressure, and Trai has made some suggestions as to what might ease the situation in the telecom industry

By January 22nd, 2020 AT 6:39 PM
Highlights
  • Trai has talked about unbundling of infrastructure
  • The regulator is also in favour of local telecom equipment manufacturing
  • Trai has also suggested other innovative investments to ease the situation

The telecom industry has been under massive distress. The latest in the list of financial burdens over the telecom industry is the Rs 1.47 lakh crore dues which the telecom companies have to pay to the Department of Telecommunications (DoT) for license fees, Spectrum Usage charges (SUC) and more. However, all of this has also got the Telecom Regulatory Authority of India (Trai) worried as well. The sector regulator which oversees the rules in the industry is even suggesting changes about what the telecom operators should be doing to improve their financial situations and the overall situation of the industry. According to a new ETTelecom report, RS Sharma, the Chairman of Trai has said that the telecom operators need to come up with innovative investment solutions like unbundling of infrastructure and investments for different services in the telecom industry if they want to finance the 5G technology and want to have an early adoption of the technology. These suggestions by RS Sharma were made at the ‘Telecom Summit 2020 5G Technology: Forging Ahead Into a Smarter India,’ organised by the PHD Chamber of Commerce & Industry (PHDCCI) and the Telecom Equipment Manufacturers Association (TEMA).

trai-suggestion-unbundling-infrastructure-ease

Equipment Manufacturing in India Favoured

The Trai chairman also said that it has been in favour of local manufacturing of telecom equipment and has already sent out its recommendations to the government. Sharma also remarked that the telecom operators must not be the only one investing in the country’s approach to 5G technology. However, the unbundling of services an the infrastructure is something that could help the telecom operators in taking up the investments which is required for 5G technology, its deployment and adaption which is going to be huge.

Ajit Pai, advisor, Niti Ayog said, “The key issue is to explore the possibilities of common infrastructure and sharing the same and how to frame policies for this so that no one is hurt.” He also added that asset monetisation is something that the telecom companies can consider.

Apprehension Over 5G technology

Sandeep Agarwal, Chairman, Telecom Committee of the PHDCCI also chipped in his thoughts and said, “ITI and C-DOT can be used to invest in higher technology, optical fibre preforms and chip manufacturing. The foreign companies must be allowed access to Indian market only on the condition they sell technology and allow manufacture of licensed telecom equipment in India.” He also said that the government should consider the fact whether or not it is the best time to embrace 5G.

5G Spectrum Prices Considered too High

There have been doubts going on in the industry about the affordability of 5G in India and whether or not the telecom companies have proper resources for to buy the 5G spectrum and properly deploy the use-cases which have been suggested by them. Until now the debate has been about the 4G and 5G spectrum auction which is slated to happen sometime in March 2020. However, the telecom companies have wanted a delayed auction since they do not have enough resources to invest in the 5G spectrum. Also, the reserve price of the spectrum, which was suggested by Trai to be Rs 490 crore per unit was thought to be too high for the telecom companies. There is also another issue of insufficient quantum of the spectrum which is because the DoT has already allocated a chunk of spectrum to defence services. As such, not much enthusiasm is expected in the upcoming auctions.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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