Trai Maps Out New Plans for Telecom Infrastructure Providers to Reduce Financial Pressure on Telcos

Trai plans to increase the scope of firms that provide telecom infrastructure services to reduce the capex and opex of telecom operators

By September 2nd, 2019 AT 6:37 PM
Highlights
  • Currently, these firms only deploy the infrastructure on telcos' behalf
  • After the new rules are implemented, they will be able to share the ownership on the services

As per the Telecom Regulatory Authority of India (Trai), by increasing the scope of infrastructure providers, which is aimed at infrastructure from services it would be able to reduce capital and operational expenses of the telecom operators. As per the sector regulator, this would also help the stress telecom operators and would increase the ease of doing business. As per an ET Telecom report, Trai chairman, RS Sharma remarked, “Services and infrastructure will be unbundled, and it would ultimately become infrastructure as a service (IaaS) for telecom carriers, and they can easily share networks and reduce capital (capex) and operational expenditure (opex).”

Telcos Could Be Able to Save 40% on Capital Expenses

As per the estimates charted out by the industry, if the regulator’s move goes through, then there could be around 40% savings on capital expense by telecom service providers. In August, the telecom regulator also put together a consultation paper which was aimed at reviewing the scope of infrastructure providers, or IP-I entities. These entities are aimed at providing towers on rent or sale to licensed telcos, in addition to other assets like dark fibre and duct space. Right now, these companies are not allowed to own or actively share these assets, but can only deploy these services on behalf of the telecom operators. But, now the sector regulator is exploring whether or not these companies would be able to offer active infrastructures such as feeder cable, common antenna, radio access network (RAN), and transmission systems.

The national policy which maps out an enhanced scope for telecom infrastructure companies with the goal of promoting and incentivising the deployment of common shareable passive, as well as active infrastructure, also aligns with the new consultation paper that Trai has floated in August. As per Trai chairman, the regulator is focused towards promoting infrastructure sharing so that the costs are reduced for the telecom operators. There is also the fact to consider that service providers already outsource network maintenance.

Telecom Infrastructure Firms Appreciate Trai’s Plan

Tower and Infrastructure Providers Association (Taipa) that represents telecom infrastructure firms in the country, also remarked that the new move which Trai is ideating upon is welcome. The association also added that active and passive infrastructure sharing would bring numerous benefits to the industry, which is currently financially strained. It is well known that the telecom industry currently remains under a massive Rs 7 lakh crore debt and consists of just three major private players. This has been the result of the data tariff war, which was kickstarted after the entry of Mukesh Ambani led telecom operator, Reliance Jio in the playing field.

“The move if allowed will reduce capital and operational expenditure, allow faster time to roll out services, provide energy efficiencies and reduces entry barriers,” Taipa director general Tilak Raj Dua said about the new move by Trai.

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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