Telecom Regulatory Authority of India (IS/ISO 9001:2008 Certified Organisation) Annual Report 2012-13 Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg, (Old Minto Road ), New Delhi – 110002 Telephone : +91-11-23236308 Fax No: +91-11-23213294 E-mail : [email protected] Website : http://www.trai.gov.in Annual Report 2012-13 ❚ i ii ❚ Annual Report 2011-12 Letter of Transmittal To the Central Government through Hon’ble Minister of Communications and Information Technology It is my privilege to forward the 16th Annual Report for the year 2012-13 of Telecom Regulatory Authority of India to be laid before each House of Parliament. Included in this report is the information required to be forwarded to the Central Government under the provisions of the Telecom Regulatory Authority of India Act, 1997, as amended by TRAI (Amendment) Act, 2000. The report contains an overview of the Telecom Sector and a summary of the key initiatives of TRAI on the regulatory issues with specific reference to the functions mandated to it under the Act. The Audited Annual Statement of Accounts of TRAI has also been included in the report. (DR. RAHUL KHULLAR) CHAIRPERSON Dated: 18th November 2013 Annual Report 2012-13 ❚ iii iv ❚ Annual Report 2011-12 TABLE OF CONTENTS Sl.No. Particulars Page Nos. Overview 1-9 PART - I Policies and Programmes 11-67 A. Review of General Environment in the Telecom Sector B. Review of Policies and Programmes Annexures to Part - I PART - II Review of working and operation of the Telecom Regulatory Authority of India 69-122 PART - III Functions of Telecom Regulatory Authority of India in respect of matters specified in Section 11 of Telecom Regulatory Authority of India Act 123-136 PART - IV Organizational matters of Telecom Regulatory Authority of India and Financial performance A. Organizational matters of Telecom Regulatory Authority of India 137-153 B. Audited Accounts of TRAI for the year 2012-13 155-184 C. Audited Contributory Provident Fund Accounts of TRAI for the year 2012-13 185-205 List of abbreviations used in the compilation 206-210 Annual Report 2012-13 ❚ v vi ❚ Annual Report 2011-12 OVERVIEW OF TELECOM & BROADCASTING SECTORS Annual Report 2012-13 ❚ 1 2 ❚ Annual Report 2012-13 OVERVIEW 1. The year 2012-13 has been an eventful year for the telecommunications and broadcasting sectors. In the telecom sector, activities centred around the National Telecom Policy 2012, Spectrum Management, Spectrum Auction and Unified Licensing. In the broadcasting sector, based on the Authority’s recommendations, a landmark decision has been taken by the Government to migrate to Digital Addressable Cable TV Services. The Authority has laid down an appropriate regulatory framework for the migration to take place. Besides, the Authority has taken a number of measures in the consumers’ interest; these include steps in the areas of quality of service, tariffs, transparency in service provision, mobile number portability, protection of telecom consumers from the menace of unsolicited commercial communications and consumer complaint redressal. 2. The significant events relating to Telecom and Broadcasting sectors during the year 2012-13 were as follows: I. Telecom Sector (i) The Telecom Sector witnessed a marginal decline in the number of subscribers during the year 2012-13. At the end of the financial year, the subscriber base was 898.02 million, out of which 867.80 million were wireless subscribers. During the year, wireless subscriber base recorded a decline of 51.37 million, while the overall teledensity declined marginally to 73.32 from 78.66. The year also saw increase in rural teledensity to 41.02 from 39.22 while the urban teledensity decreased to 146.96 from 169.55. During the year, 47.82 million subscribers submitted their porting requests to different service providers for availing Mobile Number Portability (MNP) facility. (ii) At the end of the financial year, the number of Internet subscribers (Narrow and Broadband) was 21.61 million. While the number of Broadband connections increased from 13.81 million to 15.05 million, also, there were Annual Report 2012-13 ❚ 3 143.20 million subscribers who Supreme Court cancelling UAS licenses accessed internet through wireless granted on or after 10.01.2008 by DoT, phones. TRAI issued recommendations on “Exit- Policy for various telecom licences” (iii) An important aspect of TRAI’s functions dated 18th April 2012. TRAI as mandated under the TRAI Act is to recommended that at present there is make recommendations to the no need for a separate Exit Policy for all Government on diverse subjects types of licences. including market structures and entry of new operators in the sector, the (v) Pursuant to the Judgment dated 2nd licensing framework, management of February, 2012 of Hon’ble Supreme scarce resources such as spectrum, Court of India, the Authority gave its consumer safety and security. Under recommendations on ‘Auction of this mandate, several significant policy Spectrum’ on 23rd April 2012. The issues regulatory recommendations were covered in the recommendations were made during the year which include auction format, eligibility, spectrum recommendations on ‘Guidelines for block size, spectrum cap, reserve price, Unified Licence/Class Licence and spectrum mortgage, roll-out Migration of Existing Licences’ dated obligations, spectrum usage charges, 16th April 2012. TRAI recommended validity period, spectrum trading, three levels of Unified Licences; availability of spectrum in the 700/800/ National level, Service Area level and 900/1800/2100/2300 MHz bands, District level. The one-time non- liberalisation of spectrum, re-farming of refundable Entry Fee for Unified Licence spectrum etc. DoT referred some of shall be (a) Rs. 15 crore for a National these recommendations back to TRAI level Unified Licence; (b) Rs. 1 crore for alongwith its comments for certain each Service area level Unified Licence clarifications / reconsideration. After except for Jammu & Kashmir and North due deliberations on the points raised East Service areas, where Entry fee will by DoT, the Authority sent its be Rs. 50 lakh each, and (c) Rs.10 lakh clarifications / revised recommenda- for each District level Unified Licence. tions to DoT on 12th May 2012. DoT had referred some of these (vi) In order to facilitate use of digital recommendations back to TRAI for Cordless Telecommunication Systems clarification /reconsideration. TRAI after (CTS) for improved indoor coverage considering DoT’s comments, released requirement of residences and its response / revised recommendations enterprises and also to ensure efficient on 12th May 2012. use of spectrum, the Authority gave its (iv) Consequent to the request of DoT and recommendations on ‘Allocation of in view of judgment of the Hon’ble Spectrum Resources for Residential and 4 ❚ Annual Report 2012-13 Enterprise Intra-Telecommunication (x) In order to ensure strict compliance to Requirements/ Cordless Tele- the MNP regulations by Access communications Systems (CTS)’ on 12th Providers, the Authority amended the October 2012. TRAI recommended that MNP regulations for incorporating the 1880-1900 MHz band should be de- provisions for levy of financial licensed for low power operations of disincentives where contravention is CTS for private and indoor (not for established in rejection of porting commercial) use. requests and also in the timelines specified in the regulations. (vii) The Department of Telecommuni- cations through its letter No. 20-291/ (xi) In order to address issues relating to 2010-AS-I dated 21st December 2012 corporate mobile numbers, TRAI issued referred the ‘Terms & Conditions for a draft regulation for consultation with Unified License (Access Services)’ to respect to separate process for porting TRAI. In the letter, DoT stated that there of corporate mobile numbers. is a requirement to issue fresh licenses (xii) Pursuant to the decision of the Hon’ble to the successful new entrants in the Supreme Court regarding quashing of auction of spectrum held in November, certain licenses, in order to protect the 2012. After examination of Unified interest of telecom consumers, TRAI License (Access Services), the Authority issued various directions to Telecom gave its recommendations on 2nd Access Providers and MNPSPs on January 2013. Mobile Number Portability. (viii) In the recommendations on ‘IMT – (xiii) DoT sought recommendations of the Advanced Mobile Wireless Broadband Authority regarding continuation of Services’ dated 19th March 2013, TRAI support to Bharat Sanchar Nigam has recommended that APT700 band Limited (BSNL) from the USO Fund for plan should be adopted for the 700 MHz its rural wireline connections installed spectrum band (698-806 MHz) with prior to 1.4.2002. After careful FDD based 2x45 MHz frequency consideration of inputs received from arrangement. BSNL and consultation with (ix) During the year, TRAI initiated stakeholders, the Authority consultation process on (a) Telecom recommended support to BSNL from network failures during Emergencies/ the USO Fund for sustenance of rural Disasters – Priority routing of calls of wire-line connections installed before persons engaged in ‘response and 01.04.2002, could continue for a further recovery’ (b) Universal Single Number period of two years from July 2011, at Based Integrated Emergency the rate of Rs.1500 crore for the first Communication and Response System” year and Rs.1250 crore for the second (c) Full Mobile Number Portability. year. Annual Report 2012-13 ❚ 5 (xiv) DoT sought TRAI’s