Trai drops probe against Voda Idea on priority plan as telco tweaks offer

 Telecom regulator Trai has decided to drop proceedings against Vodafone Idea Ltd (VIL) in priority plan matter after the telco withdrew contentious claims on faster speed and modified its offering.

The move brings down curtains on the controversial priority plan issue, which saw the Telecom Regulatory Authority of India (Trai) initiating a probe into telco's claims of priority network and faster data speeds for premium customers.

Last month, the regulator had slapped a show-cause notice on VIL over its priority mobile plan, saying the tariff offer lacked transparency and was "misleading" and not in compliance with regulatory framework.

Faced with regulatory heat, VIL recently dropped the faster data speed claims which formed a prominent part of its pay-more-for-priority-treatment offering and filed a revised plan with Trai.

The regulator has now informed VIL that "the authority has decided not to proceed with the investigation/ further inquiry".

Trai letter, seen by PTI, noted that the operator has informed that the earlier RedX plan has been discontinued and that a new tariff plan of RedX, without the claim of priority 4G network feature with faster speed, has been filed.

"It has been further stated that VIL believes the same would address the concerns of the authority and based on the same, VIL requested the authority to grant closure to the pending enquiry," the regulator said.

Vodafone Idea set to drop brand 'Idea' from postpaid services

Telecomoperator Vodafone Idea will drop brand name "Idea" from its postpaid services, according to an announcement made by the company on Thursday.
The company's prepaid customers will, however, continue to get services under both Vodafone and Idea brands.

"Vodafone RED postpaid plans will be available to customers from all stores and digital channels of both Vodafone and Idea brands.
"While all new postpaid customers will be on-boarded directly to Vodafone RED plans as per their usage and preference, all existing customers of Idea Nirvana, the postpaid offering under the Idea brand, will be migrated to similar Vodafone RED plans," the company said in a statement.
Vodafone India and Idea Cellular merged their mobile businesses in August 2018 to create Vodafone Idea Ltd. Both the brands are synchronising their entire business.
The move to migrate postpaid customers to Vodafone Red is a part of the company's synergy plan.
"Beginning with Mumbai, this initiative will be rolled out in a phased manner to cover all circles over the next few months," the statement said.
The change is applicable to enterprise Idea postpaid customers as well.
"Prepaid products will continue to be offered under both Vodafone and Idea brands nationally across all circles via respective retail and digital channels enabling customers to enjoy a rich portfolio of services and benefits under their preferred brand," the statement said.

Govt approves raising FDI in Bharti Airtel to 100% from 49% allowed earlier

The Department of Telecom(DoT) has approved raising of foreign direct investment in Bharti Airtel to 100 per cent from 49 per cent allowed earlier, a stock exchange filing of the company said on Tuesday.
The company also has the approval of the Reserve Bank of India (RBI) that allowed foreign investors to hold up to 74 per cent stake in the company.

"Bharti Airtel Limited has received the approval from the Department of Telecommunications (DoT) vide its letter dated January 20, 2020, for increasing the limit of foreign investment up to 100 per cent of the paid-up capital of the company," the filing said.
The approval comes few days before the company has to clear statutory liabilities of up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is spectrum dues (excluding the dues of Telenor and Tata Teleservices).
"...the aforesaid approval read together with the RBI approval dated July 3, 2014 granted to the company allows the FPIs/FIIs to invest upto 74 per cent of the paid up capital of the company," it said.

Telecom sector's gross revenue declined by Rs 41,000 cr in 3 years: Prasad

The telecom sector's gross revenue fell about Rs 41,000 crore in three years on account of a dip in mobile services rates, said TelecomMinister Ravi Shankar Prasad on Wednesday.
Gross revenue of the telecom sector in 2016-17 was Rs 2.65 lakh crore, which had reduced to Rs 2.46 lakh crore a year later and then to Rs 2.24 lakh crore in 2018-19, Prasad said in a written reply to a question in the Lok Sabha.

"Due to fierce competition in the telecom sector over the recent years, telecom service providers (TSPs) have revised their tariff downwards. As a result, gross revenue (GR) and adjusted gross revenue (AGR) of all TSPs have declined for last three financial years," minister said.
AGR, on which the government earns revenue, also declined by around Rs 46,000 crore.
According to the data shared by Prasad, AGR declined from Rs 1.85 lakh crore in 2016-17 to Rs 1.5 lakh crore a year later and Rs 1.39 lakh crore in 2018-19.
"Accordingly, licence fee, which is 8 per cent of AGR, and spectrum usage charges, which are 3 to 5 per cent of AGR, have also decreased," Prasad said.
The minister said that to remain competitive in the market, BSNL has also reduced tariff and the same has been reflected in the financial statements.
"Despite increase in the subscriber base, revenue earned from mobile services has declined in the last three years," he said.
According to data shared by Prasad, BSNL's revenue from mobile services more than halved to Rs 4,708.63 crore in 2018-19 from Rs 11,271.95 crore in 2016-17.

AGR verdict: Sunil Mittal approaches Prasad, others over statutory dues

Telecom tycoon Sunil Bharti Mittal on Monday came knocking at the doors of top government officials including Telecom Minister Ravi Shankar Prasad, over billions of dollars in statutory dues like spectrum and licence fee liability that his and other telcos had not fully provisioned in their accounts.
Sources said Mittal first met Prasad and then Telecom Secretary Anshu Prakash, apparently over the liability that arises from the Supreme Court upholding government's view on how revenues should be calculated for sharing of statutory dues.
Kumar Mangalam Birla, head of Vodafone-Idea Ltd that also has been severely hit by the apex court ruling, was expected to come for meeting but has now sought a different time, they said.
Delivering its verdict, the Supreme Court had on October 24 upheld government contention that non-core revenue in telecoms groups should be included in adjusted gross revenue -- the figure on which statutory levies are charged.
Sources said the telecom operators are looking at the government for a possible relief such as waiver of penalties and interest though the Supreme Court had categorically stated that companies must pay many years worth of charges plus interest and penalties.
Ideally, companies are required to make provisions in their books for any potential liability that may arise from a legal dispute.
While emails sent to Bharti Airtel and Vodafone-Idea on the impact of the Supreme Court judgment and provisioning remained went unanswered, industry sources said provisioning for the full amount was not made. The companies also did not response to a seperate email on meeting with the Government.
Also, there is no sight of promoters willing to infuse more equity into the companies to clear the liabilities.
According to the DoT's calculations, Bharti Airtel faces a liability of around Rs 42,000 crore after including licence fees and spectrum usage charges while Vodafone-Idea may have to pay about Rs 40,000 crore.
Initially, Telecom Service provider (TSPs) had to pay a fixed license fee. The Government in 1999 offered a new package, known as 'Migration Package', giving an option to the licensees to migrate from fixed license fee to revenue sharing fee with a principle of 'Pay as you Earn'. This was accepted by the operators unconditionally.
License fee and interest till the date of migration i.e. July 31, 1999, was paid by them and no dues were waived off.
The 'revenue sharing' regime was so designed that the Central Government becomes a partner or sharer of 'gross revenue of the company'. An annual license fee is payable as a percentage of Adjusted Gross Revenue (AGR). The license fee initially was 15 per cent of the AGR and progressively reduced to 8 per cent in 2013 and many saw it as an extremely beneficial regime for telcos.
However, AGR calculations became a point of dispute with some in the government feeling that funds due to the exchequer were being diverted to create new businesses within and outside the country.
The Supreme Court had in an order way back in 2010 ruled that "it was not open to a TSP to turn around and agitate any dispute after availing of the migration package". And then again in October 2011, it held that "TDSAT has no jurisdiction to exclude certain items of revenue, which were included in the definition of AGR."
But the TSPs neither paid the government nor created any provisions in their books of accounts for past and future payment of license fee (LC) and spectrum usage charge (SUC) on the basis of law laid down by the Supreme Court, sources said.
Non-disclosure of known contingent liability and outstanding dues pertaining to LF and SUC in the statement of accounts and balance sheet is an economic offense under the Companies Act.
Supreme Court in the judgment last week said that "No litigant can be permitted to reap fruits on such inconsistent and litigate for decades in several rounds which is not so uncommon but is disturbing scenario projected in many cases. We have examined the matter upon merits and then the aforementioned conclusions indicate the frivolous nature of objections."

After the judgment, the telcos have stated that they don't have money to pay the government.
Government officials, however, feel both companies have enough capacity and capability to raise funds through means such as equity from promoters and monetizing some of their assets. Any waiver of dues would be at the cost of taxpayers and public exchequer money and open to review by government auditor, CAG, they added.

Trai sets new quality norms for 4G networks to check call drop, voice mute

India's telecom regulator on Tuesday released new parameters for assessing call quality on the 4G network with a view to checking problems like voice mute faced by customers.
The Telecom Regulatory Authority of India (Trai) has decided to measure call quality on the 4G network in terms of data packets -- a parameter different from benchmarks used for assessing call drops on 2G and 3G networks.

The regulator has mandated telecom operators to ensure that not more than or equal to 2 per cent of total data packets transmitted during uplink and downlink of calls should be lost so that customers get to experience better call quality.
New norms would be applicable from October 1.
Voice calls on 4G network are made using data as the entire network is developed using Internet protocol (IP) technology.
In case of 2G and 3G networks, customers experience automatic disconnection of calls which is called as 'call drop'. However, since the advent of 4G network, customers often do not get to hear voice from the other side due to data loss and disconnect call on their own. Such disconnection does not qualify as a call drop under the norms for 2G and 3G networks.
Additionally, Trai also directed telecom operators to conduct field test for ascertaining reason for delay in setting up of call on 4G network every quarter starting October 1.
ALSO READ: Trai to penalise telcos for call drop violations in March quarter
"Authority considered the views of stakeholders and decided to introduce two new network parameters for QoS regulations 'Down Link (DL) Packet Drop Rate or DL-PDR' and 'Up Link (UL) Packet Drop Rate or UL-PDR', to measure overall packet loss or drop in both downlink and uplink at PDCP (Packet Data Convergence Protocol) layer," Trai said.
When a person speaks the voice is converted to data and is sent to target destination or to the device of person on the other end.
ALSO READ: India's LTE internet reach widens but 4G speed slower than Pakistan: Report
"Guidelines for evaluation of radio interface technologies for IMT Advance', a user is defined to have experienced a voice outage if less than 98 per cent of the packets have been delivered successfully. In view of above, Authority decided to prescribe benchmarks as less than or equal to 2 per cent for both the parameters," Trai said.

Telecom Commission approves net neutrality rules as recommended by Trai

The Telecom Commission today approved net neutrality rules which bar service providers from discriminating against Internet content and services by blocking, throttling or granting them higher speed access.
Some mission critical applications or services like remote surgery and autonomous cars will however be kept out of the purview of net neutrality framework.

"The Telecom Commission (TC) today approved net neutrality as recommended by Trai expect some critical services will be kept out of its purview," Telecom Secretary Aruna Sundararajan told reporters here.
The Telecom Regulatory Authority of India had recommended restrictions on service providers from entering into agreements which lead to discriminatory treatment of content on the Internet.
TC also approved the new telecom policy -- National Digital Communications Policy 2018 -- for seeking approval of the Union Cabinet, Sundararajan said.
"Everybody in the meeting today said that digital infrastructure is even more important than physical infrastructure for India... CEO of Niti Ayog (Amitabh Kant) said that for...districts, we must ensure digital infrastructure is provided at the earliest. Therefore, India must have ease of doing business and enabling policy environment," she said.
An official, who was part of the meeting, said that the TC has approved installation of around 12.5 lakh WiFi hotspot in all gram panchayats with viability gap funding of around Rs 6,000 crore by December 2018.

Relief for telecom sector! Govt okays measures to facilitate investments

The government on Wednesday cleared a relief package for the debt-ridden telecom sector, giving more time to operators to pay for the spectrum bought in auctions.
It has also relaxed the spectrum holding limit for the telecom operators, according to an official spokesperson.
The package was cleared by the Cabinet based on the recommendations of the Inter Ministerial Group (IMG) on the telecom sector.
The IMG was tasked last year to suggest policy reforms and strategic interventions for the troubled sector bruised by falling tariffs, eroding profitability, and mounting debt in the face of stiff competition from new entrant Reliance Jio.
The official said the Cabinet has approved the two key measures to facilitate investments and consolidation in the sector, facing Rs 4.6 trillion debt.
These include restructuring of deferred payment liabilities of telecom service providers for spectrum and revision of limit of spectrum holding caps.
These measures are expected to increase the cash flow for telecom operators immediately, providing them some relief, the official said.
Moreover, revising the limit for spectrum holding will facilitate consolidation of telecom players and may encourage their participation in future auctions.
The IMG, in its recommendations submitted last year, had mooted the extension of time period for the payment of spectrum bought in auctions by operators to 16 years from the current 10 years.
Currently, a portion of spectrum auction amount is taken as upfront payment by Department of Telecom(DoT) and the balance, after a two-year moratorium, is paid out every year -- 10 instalments in all.
The Telecom Commission - which is the highest policy making body of the Telecom Department - had also approved sectoral regulator Trai's recommendation that the ceiling on spectrum held by mobile operators within a particular band be removed.
It had suggested 50 per cent cap on combined radiowave holding in efficient bands.
The IMG had held eight meetings over a period of several months but in its recommendations, had stayed away from suggesting big-bang reforms.
Instead, its recommendations focused on easing the short-term pain points to give the sector time to rework its investments and business strategy.
The Indian telecom industry, which is locked in an intense tariff war, owes a staggering Rs 4.6 trillion to various financial institutions and banks.
At the same time, large operators have been flagging pressure on revenue and profitability, blaming the rock-bottom data tariffs and free offerings of newcomer Reliance Jio for deteriorating financial health of the sector.
Telecom operators have traded charges on multiple occasions, blaming each other for the sector's financial difficulties.
Reliance Jio accused incumbent operators of milking the sector using borrowed money while older players (Airtel, Vodafone and Idea) blamed free voice and data offering by the Mukesh Ambani firm for bleeding the sector.

Telcos face fine up to Rs 5 mn per circle if service rates are predatory

Defining the concept of non-discrimination and non-predation, the Telecom Regulatory Authority of India (Trai) on Friday said it would impose a penalty to the tune of Rs 5 million per circle on any telecom operator found to be involved in offering predatory tariffs.
Trai’s new rules suggest a tariff can be considered predatory if a significant market player (SMP) offers services at a price which is below the average variable cost in a “relevant market” with a view to reducing competition or eliminate competitors. SMP is a service provider holding a share of at least 30 per cent in a relevant market, which should be defined based on any of the two parameters — subscriber base and gross revenue.
It would mean incumbent operators like Bharti Airtel, Vodafone, and Idea Cellular cannot offer tariffs below their average variable cost as they are SMPs in many markets, Trai sources said. Reliance Jio is yet to become an SMP and therefore would not be affected by the new norms.
Trai’s rules on “transparent pricing’’ follow incumbent operators’ complaint to the regulator against Reliance Jio for offering “predatory tariffs’’. Telcos such as Bharti Airtel, Idea Cellular, and Vodafone have maintained that Jio’s tariffs are below cost and not compliant with the principles of interconnect usage charges (IUC). After the initial free offers, Jio went commercial on September 5, 2016. But, as part of a promotion under the Welcome offer, the firm gave free calls and data for another three months before extending again and renaming the plan as Happy New Year Offer.
The new rules are being interpreted as a setback for the incumbents. Trai has clarified in these rules that IUC cannot be taken as floor for the retail tariff. It has decided to remove the requirement of IUC compliance from the reporting requirement.
Trai has said prices are considered predatory when a significant market player sets prices so low that it can be considered rational only if it reduces competition, eliminates competitors or deters entry of new market players. Predatory pricing by a significant market player involves deliberate sacrifice of profit in order to force competitors to exit the market, the regulator said. Non-predation means not indulging in predatory pricing by a service provider having SMP, it added.
Estimates show Airtel is a significant market player in 15 circles, Vodafone in four and Idea in three.
However, after the merger, Idea-Vodafone will be a significant market player in about 16 to 18 circles. Jio also has gained around 18 per cent share in circles like Punjab and in the coming years may become a significant player at least in a few circles. Idea Cellular had sought the threshold for SMP to be fixed at 50 per cent or more.
There are 22 telecom circles in the country. Airtel, Vodafone, Idea Cellular and Reliance Jio have operations in all the circles whereas state-run telecom firm BSNL operates in 20 circles and MTNL in two. Aircel also operates in select circles.
Taking a tough stand against predatory pricing, Trai said it may examine tariffs of an SMP on reference from any person or suo motu, to determine the existence of predatory pricing. The Authority may disallow the relevant tariffs if they are found to be predatory.
“In case of tariff being found predatory, the service provider shall, without prejudice to the terms and conditions of its licence...or directions issued, thereunder, be liable to pay by way of financial disincentive an amount not exceeding Rs 5 million per tariff plan for each service area as the Authority may by order direct,” Trai said.
The regulator will determine relevant market based on relevant product against which it receives a complaint. It will arrive at “variable cost” after deducting fixed cost and share of fixed overheads borne by the company from total cost of incurred by it for running business during the period under review.
The regulator also said that telecom operators will have to provide services to all subscribers availing the same tariff plan in a non-discriminatory manner.
It is the obligation of a service provider to report to the Authority any new tariff within seven working days from the date of its implementation after conducting a self-check to ensure that the tariff is consistent with the regulatory principles.
Telecommunications Tariff Order
Operators need to report any new tariff to Trai within seven days
No telco should discriminate between subscribers of the same class
Promotional offer period is restricted to 90 days but benefits can be for an indefinite period
IUC compliance removed from reporting requirement
Operators can offer 25 tariff plans in a service area