Response on Voda-Idea’s RedX plan within a week: Trai chief

Vodafone Idea Ltd, which is under scrutiny of the Telecom Regulatory Authority of India (Trai) over its RedX premium plan, last week submitted its responses to the regulator. In an interview, Trai chairman R.S. Sharma said the response is under investigation and the results will be out in a week. Sharma, 65, was given a rare two-year extension till 30 September. Sharma shared his views on higher tariffs, and the need to have more service providers in the 5G space. Edited excerpts:

R. S. Sharma , Chairman ,The Telecom Regulatory Authority of India (TRAI)

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R. S. Sharma , Chairman ,The Telecom Regulatory Authority of India (TRAI)

What is the status of the probe into Vodafone Idea’s RedX premium plan, which is allegedly in violation of Trai rules?

Trai’s investigation is not about gains and losses of a company. The probe is about certain principles, and we are asking certain specific questions on the plan. The response (from Vodafone Idea) has come recently. They challenged our decision (to withhold the plan from on-boarding new customers) at TDSAT (Telecom Disputes Settlement and Appellate Tribunal), which directed us to investigate it. Vodafone Idea has submitted the answers to our questions. We are examining them, and within a week, we will come out with the final response.

Is India’s telecom sector heading towards a duopoly, considering Vodafone Idea and state-owned BSNL’s position?

It’s not a duopoly, it is actually a 3+1 market—three players in the private sector and one (owned by the government). We have a very robust market. Let us also understand that in the entire world, stabilized markets have the 3+1 equation. So, it is not unusual for India. With regards to calling some operators weak and some strong, I don’t agree with these definitions. I think everybody is doing their best to provide services, so I am not really worried on that front. As far as their economics are concerned, telecom services providers are free to increase tariffs, which have been under forbearance since last 16 years. We are not interfering in the tariff plans at all.

Telecom operators have spoken about raising tariffs in the next one year, first to 200 per user and eventually to 300. What is your view?

The prices are under forbearance, and it is not just today, it is from the day when one-minute calling cost was 16 and 80 paise. We are not even thinking of forgoing that forbearance policy. It is the business of telecom operators, and increasing prices will be their decision. We don’t put any constraint on any particular plan of theirs, whether they want to increase or decrease it, they are free to do so.

Should we have more players offering 5G services?

Yes. I am not saying that the number of telecom service providers should increase, but I think the service provisioning on a paradigm will have to shift from the current scenario. Currently, telecom operators have the resources, infrastructure, network and spectrum, and they provide services till the last mile. This vertical integration has to break down and unbundle in the 5G scenario because you will not only have 1.2 billion customers, you will have billions of devices and varied applications, besides the users, connected. Therefore, I feel end-to-end service provisioning will probably not work out. There will be a number of service providers who will be joined together. Ultimately, we will see hierarchy (among those providing services) — some will provide bandwidth, some network and infrastructure and others will look at last-mile arrangements.

Existing operators have often highlighted that levies and taxes are too high, even unsustainable. What is your take?

I personally have no opinion. But we have already recommended the government to reduce some levies in telecom such as spectrum usage charges and licence fee. We have been advocating for reduction in levies at various points in time. The final decision to reduce the levies is with the department of telecom and the ministry of finance.

Do you have any unfinished agenda before completing your tenure?

Regulatory systems are not pre-emptive. So long as the market is functioning appropriately, there is really no need for a regulation. Regulations should be thought of as rules which should be imposed only when there is a need. First, we have always believed in light-touch regulation, so one can’t say that there is an unfinished agenda. The second part, besides regulation, relates to three areas where Trai has direct responsibility. These areas are tariff, quality of service and interconnection.

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