India’s BQ: TRAI Chairman On India’s Next Leap In Connectivity

This is a series of articles by leaders on how India can raise its Business Quotient.

The Indian telecommunication sector has emerged as a strong growth engine for the Indian economy in the last decade, with the country witnessing tremendous growth in the wireless sector. The country achieved astounding success in the telecommunication field – high density across the country and the world's cheapest call rates which were affordable for all. In October 2015, India hit the billion mark for its mobile phone subscriber base. As per a Telecom Regulatory Authority of India report of May 2017, there are 1,180.82 million wireless subscribers.

Data matters now; however India has a distance to go here. According to TRAI data, the total number of broadband subscribers in the country at the end of May 2017 was 291.61 million. Of this, access through mobile devices accounted for nearly 273.38 million.

This highlights the fact that India's evolution to a digital economy will depend on smartphone penetration.

Demand will inevitably spike here as data prices plummet and penetration grows. That represents a manufacturing opportunity that harmonises neatly with the ‘Make in India' initiative.

Having a ubiquitous presence of telecom connectivity throughout the country, particularly at remote places, which may not be commercially attractive, is likely to be a priority for the government. The government's push for the creation of a National Optical Fibre Network for connecting 2.5 lakh gram panchayats with support from the Universal Service Obligation Fund (USOF) is a step in the right direction. Digitisation of cable television is already at an advanced stage. Reforms such as updating the definition of ‘adjusted gross revenue', i.e. the part of gross revenue, on which a licensee pays the licence fee, recommended by TRAI, on more than one occasions, will help in removing the bottleneck in the use of cable TV for broadband.

The use of satellite for broadband proliferation is still largely untapped.

If the government acts on the TRAI's recommendations in the satellite sector such as the Open Sky Policy, opening up of the Ka band etc., that will go a long way to promote the use of satellite broadband at affordable rates.

On the spectrum policy front, slowly but steadily, we have moved toward market-based spectrum management, with the adoption of an auction for the initial assignment of the spectrum, permitting spectrum sharing, spectrum trading, spectrum liberalisation etc. Permitting virtual network operation is likely to offer new avenues of opportunities for investments in niche segments.

As the end of this decade approaches, it is expected that new challenges will open a door to new opportunities for the telecommunications industry. The next major trend that will impact telecommunications is the explosion of connected devices. This internet of things system will add billions of new connected data sources globally by 2020. It requires telecom operators to plan and bring infrastructural changes to solve challenges that come with technology advancements. I am sure the government's enabling policies will help the sector to overcome all the challenges of future.

RS Sharma is the Chairman of the Telecom Regulatory Authority of India.

The views expressed here are those of the author's and do not necessarily represent the views of BloombergQuint or its editorial team.