Telecom Regulatory Authority of India (IS/ISO 9001: 2015 Cer�ﬁed Organisa�On)

Telecom Regulatory Authority of India (IS/ISO 9001: 2015 Cerꢀfied Organisaꢀon) Annual Report 2017-18 Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg, (Old Minto Road), New Delhi-110002 Telephone : +91-11-23664147 Fax No:+91-11-23211046 <a href="/goto?url=http://www.trai.gov.in" target="_blank">Website:hꢁp://www.trai.gov.in </a>LETTER OF TRANSMITTAL To the Central Government through Hon’ble Minister of Communicaꢀons and Informaꢀon Technology It is my privilege to forward the 21st Annual Report for the year 2017-18 of the Telecom Regulatory Authority of India to be laid before both Houses of Parliament. Included in this Report is the informaꢀon 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 broadcasꢀng sectors and a summary of the key iniꢀaꢀves of TRAI on regulatory maꢁers with specific reference to the funcꢀons 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: September 2018 III TABLE OF CONTENTS <ul style="display: flex;"><li style="flex:1">Sl.No. </li><li style="flex:1">Parꢀculars </li><li style="flex:1">Page </li></ul>Nos. Overview of the Telecom and Broadcasꢀng Sectors Policies and Programmes 1-8 9-60 A. Review of General Environment in the Telecom Sector B. Review of Policies and Programmes C. Annexures to Part – I Part – I Part – II Part – III Review of working and operaꢀon of the Telecom Regulatory Authority of India 61-130 131-150 151-220 Funcꢀons of Telecom Regulatory Authority of India in respect of maꢁers specified in Secꢀon 11 of Telecom Regulatory Authority of India Act Part – IV Organizaꢀonal maꢁers of Telecom Regulatory Authority of India and Financial performance A. Organizaꢀonal maꢁers of Telecom Regulatory Authority of India B. Audited Accounts of TRAI for the year 2017-18 C. Audited Contributory Provident Fund Accounts of TRAI for the year 2017-18 VOVERVIEW OF TELECOM & BROADCASTING SECTORS 1 2OVERVIEW The Telecom Regulatory Authority of India (TRAI) was established in the year 1997 and has been regulating the telecom sector for more than two decades. The broadcasting sector was brought under the ambit of TRAI since 2004. During these two decades of existence, TRAI has performed with a mission to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society. During the year 2017-18, a number of iniꢀaꢀves were taken by TRAI to conꢀnue its mandate for creaꢀon of conducive environment for the growth of telecommunicaꢀons, broadcasꢀng & cable sectors resulꢀng in healthy compeꢀꢀve markets and recogniꢀon of India as one of the leading players in the emerging global informaꢀon society. The various measures taken by the Authority have helped in promoꢀng the growth and development of the telecom and broadcasꢀng sectors during 2017-18. These measures have also resulted in the overall benefits to the consumer in terms of choice of services, affordable tariff, beꢁer quality of services etc. This is evident from the exponenꢀal growth which could be achieved in these sectors. These growth stories have been further fuelled by a mix of several important factors, which include the emergence of new growth opportuniꢀes; healthy investments in the sectors and rapid development of technology. The resulꢀng vibrant compeꢀꢀon among players has led to affordable prices for users. At the same ꢀme, increasing awareness about the availability of telecom and broadcasꢀng services has conꢀnued to fuel the user demand for more and beꢁer services. The detailed account of this growth story is elaborated in the following chapters. 3 The growth of data usage by wireless subscribers has reached a new level showing an unprecedented growth of the sector. There has been an increase in the overall mobile coverage and data usage in the country adding more rural areas to the coverage map. With increased availability of smart phones at much affordable prices, mobile phone has become more than a communicaꢀon device, and services are becoming increasingly linked through mobile, Internet and other digital modes of delivery. The growth of 4G services has added a large number of first ꢀme subscribers who experience the advent of data revoluꢀon using these services. The mobile network is serving as a major backbone on which the important sectors of economy like banking, health and educaꢀon are riding and therefore, this sector is a great enabler in the overall economic growth of the country. “Net Neutrality”, “Ease of Doing Telecom Business”, “In-flight Connecꢀvity”, “Inputs for framing Naꢀonal Telecom Policy” etc. As far as the Tariff policy is concerned, TRAI conꢀnued with the general approach of forbearance in respect of most of the services. Important Amendments in Telecom Tariff Order (TTO) were made to ensure Transparency, Non-discriminaꢀon and Nonpredaꢀon in telecommunicaꢀon services Broadcasting sector has also been going through transition from analogue to digital era. TRAI has made efforts to meet the regulatory challenges which are being faced by broadcasting sector. In the year 2017-18, TRAI has taken several effective measures in the interest of consumers of broadcasting services. For instance the digitization of the cable sector was one of the important measures taken by TRAI which will empower the consumer and provide him with better service quality and enhanced choices. This digitization process was continuously pursued and monitored against various odds and challenges. The Authority also initiated a number of steps aimed towards bringing in measures to ensure stability and uniform growth of the sector that is presently undergoing a transformation. During the year, recommendations were made by TRAI to the Government on key issues concerning broadcasting sector such as “Issues related to Digital Radio Broadcasting in India”, “Ease of Doing Business in Broadcasting Sector” etc. Telecom sector is a fast evolving sector due to technological advancement which facilitates introducꢀon of new types of services. During the year, while discharging various recommendatory and regulatory funcꢀons, TRAI has tried to address various issues and new challenges being faced by the telecom sector. Recommendaꢀons were made to the Government on key issues including those on the subjects like “Cloud Services”, “Spectrum, RoamingandQoSrelatedrequirementsinMachineto-Machine (M2M) Communicaꢀons”, “Approach <ul style="display: flex;"><li style="flex:1">towards </li><li style="flex:1">Sustainable </li><li style="flex:1">Telecommunicaꢀons”, </li></ul>“Regulatory framework for Internet Telephony”, 4 2. The significant developments relaꢀng to Telecom and Broadcasꢀng sectors during the year 2017-18 are briefly menꢀoned below: shows subscribers exercising their preference of service provider. The Internet subscriber base in the country as on 31st March 2018 stood at 493.96 million as compared to 422.19 million as on 31st March 2017. The total broadband subscriber base in the country has increased from 276.52 million as on 31st March 2017 to 412.60 at the end of 31st March 2018. I. TELECOM SECTOR The Indian telecom sector is the second largest in the world in terms of the number of subscribers. The sector has witnessed exponenꢀal growth over the last few years which was due to many factors such as affordable tariffs, wider service availability, roll out of new faciliꢀes and services such as Mobile Number Portability (MNP), 3G and 4G, evolving consumpꢀon paꢁerns of subscribers, and conducive regulatory environment. In order to create an enabling and stable environment for telecommunicaꢀons services and to ensure greater access, transparency, non-discriminaꢀon, consumer protecꢀon, and stable growth in funcꢀoning of the sector, a comprehensive review of the regulatory framework for the telecommunicaꢀons sector has been undertaken by TRAI, which included tariff, interconnecꢀon and quality of service. To ensure transparency while proposing any change in the exisꢀng regulatory framework, TRAI follows transparent consultaꢀon process in order to give an opportunity to the stakeholders to deliberate and offer their views on the proposed regulatory framework. As part of this criꢀcal exercise that ensures that robust regulaꢀon emerges from the consultaꢀveprocess,TRAIissuedvariousimportant consultaꢀon papers inviꢀng wriꢁen comments / counter comments from the stakeholders during this year. This included Consultaꢀon Papers on “Data Speed under Wireless Broadband Plan”, “Privacy, Security and Ownership of Data in the Telecom Sector”, “Promoꢀng Local Telecom Equipment Manufacturing”, “Next Generaꢀon Conꢀnuing the growth trend, the Telecom Sector has witnessed a substanꢀal growth of subscriber base during the year 2017-18 also. At the end of the financial year, the subscriber base was 1206.22 million out of which 1183.41 million were wireless subscribers. During the year, wireless subscriber base recorded an increase of 13.23 million, with the overall tele-density of 92.84% at the end of March 2018. The year also saw an increase in the rural tele-density from 56.91% to 59.05%, while the urban tele-density decreased from 171.80% to 165.90%. During the year 2017- 18, 98.07 million subscribers have submiꢁed theirporꢀngrequeststodifferentserviceproviders for availing Mobile Number Portability (MNP) facility. With this the MNP requests increased from 272.76 million at the end of March 2017 to 370.83 million at the end of March 2018, which 5 Public Protecꢀon and Disaster Relief (PPDR) Communicaꢀon Networks”, “Making ICT Accessible to Persons with Disabiliꢀes”, “Method of Allocaꢀon of Spectrum for Public Mobile Radio Trunking Service (PMRTS) including aucꢀon as a transparent mechanism”, “Voice Services to LTE Users (including VOLTE and CS Fallback)” etc. telecommunicaꢀons sector, TRAI also issued the following key amendments and regulaꢀons during the course of the year: <ul style="display: flex;"><li style="flex:1">1. </li><li style="flex:1">The Standards of Quality of Service of </li></ul>Basic Telephone Service (Wireline) and Cellular Mobile Telephone Service (Fiꢂh Amendment) Regulaꢀons, 2017 <ul style="display: flex;"><li style="flex:1">2. </li><li style="flex:1">The Telecommunicaꢀon Interconnecꢀon </li></ul>Usage Charges (Thirteenth Amendment) Regulaꢀons, 2017 An important aspect of TRAI’s funcꢀons as mandated under the TRAI Act is to make recommendaꢀons to the Government on diverse subjects including market structure, entry of new operators in the sector, the licensing framework, management of scarce resources such as spectrum, consumersafetyandsecurityetc. While exercising this mandate, several significant policy regulatory recommendaꢀons were made during the year which included recommendaꢀons on “Adopꢀon of e-KYC service UIDAI for Fixed-line, InternetandBroadbandConnecꢀons”, “Addiꢀonal Recommendaꢀons on Sale/Rent of Internaꢀonal Roaming SIM Cards/Global Calling Cards of foreign Operators in India”, “Capꢀve VSAT CUG Policy Issues”, “Cloud Services”, “Spectrum, Roaming and QoS related requirements in Machine-toMachine (M2M) Communicaꢀons”, “Approach 3. 4. The Telecommunicaꢀon Interconnecꢀon Regulaꢀons, 2018 The Telecommunicaꢀon Interconnecꢀon Usage Charges (Fourteenth Amendment) Regulaꢀons, 2018 <ul style="display: flex;"><li style="flex:1">5. </li><li style="flex:1">Telecommunicaꢀon Mobile Number </li></ul>Portability Per Port Transacꢀon Charge and Dipping Charge (Amendment) Regulaꢀons, 2018 II. BROADCASTING SECTOR Television and Radio services together consꢀtute the Broadcasꢀng Sector. India has the world’s second largest TV market aꢂer China. As per industry esꢀmates, at the end of year 2017-18, out of a total of 2861 million households in India, around 1831 million households have Television sets. These 183 million households are being served by cable TV services, DTH services, HITS services, IPTV services, in addiꢀon to a terrestrial TV network of Doordarshan. The terrestrial TV <ul style="display: flex;"><li style="flex:1">towards </li><li style="flex:1">Sustainable </li><li style="flex:1">Telecommunicaꢀons”, </li></ul>“Regulatory framework for Internet Telephony”, “Net Neutrality”, “Ease of Doing Telecom Business” and “In-flight Connecꢀvity”. In order to keep abreast with the changing policy and regulatory requirements of the 1 Source : FICCI –EY Report 2018 6network of Doordarshan covers about 922 per cent of country’s populaꢀon through a vast network of terrestrial transmiꢁers. The pay TV sector consists of around 98.51 million Cable TV households, 67.533 million net acꢀve DTH subscribers and 1.5 million1 Head-end-in-the-sky (HITS) subscribers. The television broadcasꢀng sector comprises of 3584 broadcasters, out of which, 493 are running pay channels. On the television distribuꢀon side, there are 14694 Mulꢀ System Operators (MSOs) registered with the Ministry of Informaꢀon and Broadcasꢀng (MIB), an esꢀmated 60,0001 cable operators, 2 HITS operators, 5 pay DTH operators and a few IPTV operators. In addiꢀon, the public service broadcaster - Doordarshan also provides a free-to-air DTH service in India. At present, there are 8754 private satellite TV channels permiꢁed by the Ministry of Informaꢀon and Broadcasꢀng as on 31 March 2018, out of which, 2135 are SD pay TV channels (including 1 adverꢀsement free pay channel) and 955 are HD Pay TV channels. a 59.5% share of the overall industry revenue, other part being the advertising revenue. Subscription revenues rose from Rs. 38,7006 crore in 2016-17 to Rs. 39,3006 crore in 2017-18. Advertisement revenues grew from Rs. 20,1006 crore in 2016-17 to Rs. 26,7006 crore in 2017-18 growingbyawhopping32.8%duringtheyear. The FM (Frequency Modulation) radio broadcasting sector has also registered an impressive growth. There were 3245 private FM radio stations operational at the end of March 2018, besides the terrestrial radio network of public service broadcaster- All India Radio (AIR). AIR has network of 4697 centres and 6627 terrestrial radio transmitters [1397 MW (Medium Wave), 4758 FM and 488 SW (Short Wave)]. AIR service covers around 99.20% of the geographical area of the country while serving 99.19% of the population8. As regards Community Radio Stations, at the end of March 2018, 2169 community radio stations have become operational. The radio industry is entirely dependent on advertisement revenues and has registered a growth of around 6.03 percent during the year 2017-18. Advertisement revenues have also risen from Rs. 2046.54 crore10 in 2016-17 to Rs. 2170.04 crore10 in year 2017-18. India’s television industry revenue has grown from Rs 58,8006 crore in 2016-17 to Rs 66,0006 crore in 2017-18, thereby registering a growth of 12.24%. Subscription revenues account for 2 Source : MIB Annual Report 2017-18 3 Source : As reported by DTH operators to TRAI 4 Source : MIB website www.mib.gov.in 5 Source : As reported by broadcasters to TRAI 6 Source : FICCI –EY Report 2018 7 Source : AIR website – www.ai<a href="/goto?url=http://www.air.org.in" target="_blank">r</a><a href="/goto?url=http://www.air.org.in" target="_blank">.</a><a href="/goto?url=http://www.air.org.in" target="_blank">org.in </a>8 Source : AIR website – www.ai<a href="/goto?url=http://www.air.org.in" target="_blank">r</a><a href="/goto?url=http://www.air.org.in" target="_blank">.</a><a href="/goto?url=http://www.air.org.in" target="_blank">org.in </a>9 Ministry of I & B 10 As reported by private FM Radio operators to TRAI 7 8PART – I POLICIES AND PROGRAMMES 9 10 ꢂAꢃ REVIEW OF GENERAL ENVIRONMENT IN THE TELECOM SECTOR The growth trend in the Telecom Sector continued in 2017-18 also assisted with timely Regulatory interventions of TRAI. The sector witnessed a substantial increase in the number of subscribers during the year. At the end of financial year 2017-18, the overall telecom subscriber base has increased to 1206.22 million as compared to 1194.58 Million at the end of financial year 2016-17 registering an increase of 11.64 million subscribers. The overall subscriber base and tele-density is depicted in Table-1. Table-1: Overall Subscriber base and Tele-density <ul style="display: flex;"><li style="flex:1">Parꢀculars </li><li style="flex:1">Wireless </li><li style="flex:1">Wireline </li><li style="flex:1">Total </li></ul>Wireless+ Wireline Total Subscribers (Million) Urban Subscribers (Million) Rural Subscribers (Million) Overall Tele-density 1183.41 662.18 521.23 91.09 22.81 19.43 3.38 1206.22 681.61 524.61 <ul style="display: flex;"><li style="flex:1">92.84 </li><li style="flex:1">1.76 </li></ul><ul style="display: flex;"><li style="flex:1">Urban Tele-density </li><li style="flex:1">161.17 </li></ul>58.67 <ul style="display: flex;"><li style="flex:1">4.73 </li><li style="flex:1">165.90 </li></ul><ul style="display: flex;"><li style="flex:1">59.05 </li><li style="flex:1">Rural Tele-density </li><li style="flex:1">0.38 </li></ul>Share of Urban Subscribers Share of Rural Subscribers No. of Broadband Subscribers (Million) 55.96% 44.04% 394.65 85.19% 14.81% 17.95 56.51% 43.49% 412.60 The details of subscriber base in wireless & wireline segments; requests for Mobile Number Portability (MNP); Tele-density; Internet subscribers 11 and Quarterly Telecom Services Performance Indicators are explained in subsequent paragraphs. in comparison to the subscriber base of 1170.18 million as on 31st March <ul style="display: flex;"><li style="flex:1">2017 registering </li><li style="flex:1">a</li><li style="flex:1">growth rate of </li></ul>1.13% during the financial year 2017- 18. A comparative status of wireless subscriber base during the last 6 years is depicted in Figure-1. Wireless 1.1.1 The wireless subscriber base was 1183.41 million as on 31st March 2018 Figure - 1: Wireless Subscribers Base for the last six years since March 2013 (in million) DĂƌͲϭϯ DĂƌͲϭϰ DĂƌͲϭϱ DĂƌͲϭϲ DĂƌͲϭϳ DĂƌͲϭϴ MNP requests have increased from <ul style="display: flex;"><li style="flex:1">(b) </li><li style="flex:1">Mobile Number Portability </li></ul>272.76 Million subscribers at the end of March 2017 to 370.83 Million at the end of March 2018. The service area wise cumulative porting requests 1.1.2 During the year 2017-18, 98.07 million subscribers have submitted their porting requests to their service providers for availing Mobile Number Portability (MNP) facility. With this the at the end of March 2018 is depicted in Table-2. 12 Table-2: Service area wise cumulative porting requests at the end of March 2018 Cumulaꢀve MNP Requests (Service Area-wise) at the end of March, 2018 MNP requests processed by Total Number of Port- ing Requests Service Area Zone-I 18,006,488 24,369,182 13,562,586 1,785,847 682,538 Zone-II <ul style="display: flex;"><li style="flex:1">365,940 </li><li style="flex:1">Delhi </li><li style="flex:1">18,372,428 </li></ul>24,513,496 13,644,337 1,798,714 688,816 Gujarat Haryana 144,314 81,751 Himachal Pradesh Jammu & Kashmir Maharashtra Mumbai 12,867 6,278 25,249,877 19,486,807 13,569,350 30,747,021 19,628,916 16,011,919 168,692 <ul style="display: flex;"><li style="flex:1">252,192 </li><li style="flex:1">25,502,069 </li></ul>19,701,422 13,777,897 30,871,344 19,738,024 16,072,254 31,240,032 2,600,946 13,882,646 36,160,940 9,065,245 9,175,055 24,849,063 991,342 214,615 <ul style="display: flex;"><li style="flex:1">Punjab </li><li style="flex:1">208,547 </li></ul><ul style="display: flex;"><li style="flex:1">Rajasthan </li><li style="flex:1">124,323 </li></ul>Uꢁar Pradesh (East) Uꢁar Pradesh (West) Andhra Pradesh Assam 109,108 60,335 31,071,340 2,575,145 13,621,992 35,866,990 9,010,215 9,107,948 24,627,876 978,073 25,801 <ul style="display: flex;"><li style="flex:1">Bihar </li><li style="flex:1">260,654 </li></ul><ul style="display: flex;"><li style="flex:1">Karnataka </li><li style="flex:1">293,950 </li></ul><ul style="display: flex;"><li style="flex:1">Kerala </li><li style="flex:1">55,030 </li></ul><ul style="display: flex;"><li style="flex:1">Kolkata </li><li style="flex:1">67,107 </li></ul>Madhya Pradesh North East Orissa 221,187 13,269 <ul style="display: flex;"><li style="flex:1">54,825 </li><li style="flex:1">7,261,516 </li></ul>31,008,035 19,666,836

Telecom Regulatory Authority of India (IS/ISO 9001: 2015 Cer�ﬁed Organisa�On)

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