Telecom Regulatory Authority of India (IS/ISO 9001:2008 Certified Organisation) Annual Report 2014-15 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 2014-15 ❚ I II ❚ ANNUAL REPORT 2014-15 LETTER OF TRANSMITTAL To the Central Government through Hon’ble Minister of Communications and Information Technology It is my privilege to forward the 18th Annual Report for the year 2014-15 of the Telecom Regulatory Authority of India to be laid before both Houses 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 and Broadcasting Sectors and a summary of the key initiatives of TRAI on the regulatory matters with specific reference to the functions mandated to it under the Act. The Audited Annual Statement of Accounts of TRAI is also included in the report. (RAM SEWAK SHARMA) CHAIRPERSON Dated: December, 2015 ANNUAL REPORT 2014-15 ❚ III IV ❚ ANNUAL REPORT 2014-15 TABLE OF CONTENTS Sl.No. Particulars Page Nos. Overview 1-11 PART - I Policies and Programmes 13-76 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 77-134 Authority of India PART - III Functions of Telecom Regulatory Authority of India in respect of 135-154 matters specified in Section 11 of Telecom Regulatory Authority of India Act PART - IV Organizational matters of Telecom Regulatory Authority of India and Financial performance A. Organizational matters of Telecom Regulatory Authority of India 155-170 B. Audited Accounts of TRAI for the year 2014-15 171-201 C. Audited Contributory Provident Fund Accounts of TRAI for 202-222 the year 2014-15 List of abbreviations used in the compilation ANNUAL REPORT 2014-15 ❚ V VI ❚ ANNUAL REPORT 2014-15 OVERVIEW OF TELECOM & BROADCASTING SECTOR ANNUAL REPORT 2014-15 ❚ 1 2 ❚ ANNUAL REPORT 2014-15 OVERVIEW 1. The year 2014-15 has been an eventful year for the telecommunications and broadcasting sectors. In the telecom sector, TRAI addressed the issue of Spectrum Pricing and Spectrum Sharing. Recommendations were sent to the Government on improving telecom services in Andaman and Nicobar Islands & Lakshadweep and provisioning of INMARSAT / Satellite Services. On the tariff front, TRAI continued with the general policy of forbearance in respect of most services. The ceiling tariff for Domestic Leased Circuits (DLCs) was reduced. With this reduction, customers seeking DLCs on thin routes connecting small cities, remote and hilly areas etc. would benefit. The reduction in ceiling tariff for DLCs would also boost the overall growth of the economy. The Authority issued the International Calling Card Services (Access charges) Regulations 2014. These regulations are expected to pave the way for introduction of calling cards, resulting in real choice for the customer to pick his/her international long distance operator. This would further lower the tariff for ISD calls. Effective measures in consumer interest were also taken. In the broadcasting sector, digitisation of the cable sector which aims at empowering the consumer and providing him better service quality and enhanced choice was continuously pursued and monitored against various odds and challenging terms. The first two phases of implementation have already been completed and around 30% of the cable TV homes have been covered. TRAI also initiated a number of steps aimed at bringing in a measure of stability & uniform growth of the sector that is presently undergoing a huge transformation from the analog era. Enabling such an environment will encourage investments and bring about faster development of the broadcasting and cable services sector. 2. The significant events relating to Telecom and Broadcasting sectors during the year 2014-15 are detailed on next page. ANNUAL REPORT 2014-15 ❚ 3 I. TELECOM SECTOR consumer safety and security. Under this mandate, several significant policy (i) The Telecom Sector witnessed substantial regulatory recommendations were made growth in the number of subscribers during during the year which include the year 2014-15. At the end of the financial recommendations on ‘Provisioning of year, the subscriber base was 996.49 million INMARSAT/ Satellite Phone Services’, out of which 969.89 million were wireless ‘Guidelines on Spectrum Sharing’, subscribers. During the year, wireless ’Improving telecom services in Andaman subscriber base recorded an increase of and Nicobar Islands & Lakshadweep’, 65.38 million, while the overall tele-density ‘Allocation and Pricing of Microwave Access increased from 75.23 to 79.38. The year also (MWA) and Microwave Backbone (MWB) saw increase in rural tele-density from RF Carriers’, ‘Valuation and Reserve Price of 43.96 to 48.37 while the urban tele-density Spectrum : Licences expiring in 2015-16’ also increased from 145.78 to 148.61. and ‘Valuation and Reserve price of During the year 2014-15, 36.84 million Spectrum : 2100 MHz Band’. subscribers have submitted their porting (iii) On the request of DoT, on the requests to different service providers for appropriateness and feasibility of including availing Mobile Number Portability (MNP) INMARSAT Services ‘under unified license facility. With this the Mobile Number GMPCS Authorization’ or framing of Portability requests increased from 117.01 another authorization under the unified Million subscribers at the end of March license, the Authority formulated and 2014 to 153.85 Million at the end of March forwarded its Recommendations on 2015. The Internet subscriber base in the ‘Provisioning of INMARSAT/ Satellite Phone st country as on 31 March 2015 stood at th Services’ on 12 May 2014. 302.35 million as compared to 251.59 million as on 31st March 2014. The total (iv) With the main objective of providing an broadband subscriber base of the country opportunity to telecom service providers to increased from 60.87 million as on 31st pool their spectrum holdings and improve March 2014 to 99.20 million as on 31st spectral efficiency, the Authority made its recommendations dated 21st July 2014 on March 2015. ‘Guidelines on Spectrum Sharing’. In India, (ii) An important aspect of TRAI’s functions as spectrum holding per Telecom Service mandated under the TRAI Act is to make Provider (TSP) is small and fragmented. recommendations to the Government on Spectrum fragmentation results in under diverse subjects including market structure utilisation of scarce resource. Sharing can and entry of new operators in the sector, also provide additional network capacities the licencing framework, management of in places where there is network congestion scarce resources such as spectrum, due to a spectrum crunch. 4 ❚ ANNUAL REPORT 2014-15 (v) On the request of DoT, the Authority after “Valuation and Reserve Price of Spectrum: detailed consultation with all the 2100 MHz Band” on 31st December 2014 to stakeholders recommended a the Government. The Recommendations comprehensive telecom plan for improving discuss various methodologies that have telecom services in Andaman and Nicobar been used to arrive at the valuation of the Islands vide its recommendation dated 22nd spectrum in the 2100 MHz band and July 2014 on ‘Improving telecom services reserve prices of the spectrum in the 2100 in Andaman and Nicobar Islands & MHz band. Lakshadweep’. (ix) During the year, besides the (vi) On a specific reference from DoT on various recommendations, the Authority initiated issues related to the assignment and pricing consultation process on (a) Migration to IP of MW carriers the Authority, after based Networks (b) Delivering Broadband consultations with various stakeholders and quickly: what do we need to do? (c) internal analysis forwarded its Interconnection Usage Charges (d) recommendations on ‘Allocation and Delinking of the License for Networks from Pricing of Microwave Access (MWA) and delivery of services by way of Virtual Microwave Backbone (MWB) RF carriers’ on Network Operators and (e) Regulatory th 29 August, 2014. Framework for Over-the-Top (OTT) services. (vii) Access licences (CMTS/UAS) which were (x) Regulatory enforcement is an integral awarded in 1995-96 are due to expire in aspect of the functioning of TRAI. To ensure 2015-16. The DoT sought the better enforcement, various regulations recommendations of the Authority on the and orders have been issued prescribing applicable reserve price for all the service financial disincentives for infringements areas for auction of spectrum in 900 MHz such as wrong rejection of porting requests; and 1800 MHz bands. After consultation failure to comply with tariff reporting with the stakeholders and internal analysis, requirements or levy of excess charges on the Authority forwarded its consumers in violation of the provisions of recommendations on “Valuation and the Telecommunications Tariff Order (TTO); Reserve Price of Spectrum: Licences delay in submission of or for submission of expiring in 2015-16” to the DoT on 15th false information in Accounting Separation October 2014. Reports; non-compliance with the (viii) The Authority, considering the request of benchmarks for Network Service Quality DoT to expedite the process for its Parameters and Customer Service Quality recommendations on the reserve price of Parameters; failure to meet the prescribed 2100 MHz band, after consultations, Quality of Service benchmarks for forwarded its Recommendations on broadband services etc. ANNUAL REPORT 2014-15 ❚ 5 (xi) Looking after consumer interests is one of subscribers) and around half a million IPTV the principal mandates of TRAI. The subscribers. The terrestrial TV network of Authority has taken many important Doordarshan covers about 922 per cent of measures for setting the regulatory population of the country through a vast framework in several areas that impinge on network of terrestrial transmitters.