Trai seeks stakeholders’ views on unbundling current licensing regime

By: |
August 21, 2020 4:30 AM

The NDCP under the mission, ‘Propel India’, envisages the need to review the existing licensing, regulatory and resource allocation frameworks to incentivise investments and innovations.

Apart from UL, there is a licensing category for virtual network providers (VNOs) and a company registered as infrastructure provider-I (IP-I) can lay telecom infrastructure.Apart from UL, there is a licensing category for virtual network providers (VNOs) and a company registered as infrastructure provider-I (IP-I) can lay telecom infrastructure.

To reform the current licensing regime, the Telecom Regulatory Authority of India (Trai) on Thursday came out with a consultation paper seeking views from industry and public around unbundling of different layers such as infrastructure, network, services and applications through differential licensing. Currently, as part of the unified licence (UL), a company deploys network and related infrastructure as well as provide services. Only one UL is required for all telecom services in the entire country.

Apart from UL, there is a licensing category for virtual network providers (VNOs) and a company registered as infrastructure provider-I (IP-I) can lay telecom infrastructure.

But due to the changing ecosystem, the government wants to separate the different layers. For instance, there can be a separate licence for network providers, which allows firms to roll out network and share infrastructure with service delivery companies.

The idea is to promote start-ups, which don’t have the means to set up their own network but can take it on lease and provide services to end-consumers.

Trai came out with a pre-consultation paper on the issue in November last year. But most of the telecom operators feel that the current licensing regime already supports layered approach. Any further unbundling will make licensing regime more complex and will impact the ease of doing business. Further, the telcos feel it will be commercially-unviable for existing unified licensees to split their functions into different layers.

Also, most of the telcos have now hived off their tower and fibre infrastructure to separately established IP-I company to promote sharing and further, the sector has also witnessed sharing of spectrum and active infrastructure amongst operators and there is no need for introduction of a new licensing framework.

But some stakeholders, primarily start-ups, favour unbundling. “The different models suggested by them prescribe different layers such as network infrastructure layer, network service layer, service delivery layer and digital service layer,” Trai said.

The concept of unbundling of layers through differential licensing is enshrined in the new telecom policy, the National Digital Communications Policy (NDCP), 2018.

The NDCP under the mission, ‘Propel India’, envisages the need to review the existing licensing, regulatory and resource allocation frameworks to incentivise investments and innovations.

The policy envisages ‘enabling unbundling of different layers (infrastructure, network, services and applications) through differential licensing as one of the strategies for catalysing investments in digital communications sector. In view of the NDCP, the department of telecommunications (DoT) had sought Trai views on the matter.

The regulator seeks feedback if network services layer and service delivery layer need to be separated by introducing specific licence for network layer alone.

Also, whether certain obligations should be imposed on the existing unified licensees to encourage them to provide their network resources to VNOs.

The regulator has asked what incentives could be provided to network layer licensees in the new unbundled regime to encourage the network layer and whether the existing unified licensees should be mandated to migrate to unbundled regime or the new regime should be introduced while keeping the existing regime continued for existing licensees till the validity of their license, with an option of migration.

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