COAI Annual Report

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COAI Annual Report 2012-13

CONTENTS

I. Chairperson’s Message 1-4 II. Vice Chairman’s Message 5-8 III. Director General’s Report 9-23 IV. COAI Structure 24 V. COAI Secretariat 25-26 VI. COAI Members 27-28 VII. Indian GSM Cellular Industry- An Overview 29-38

A. Growth of Wireless Industry in India 29

B. All India Total Cellular and GSM Cellular Subscriber Base 29

C. Wireless Tele-density Across Telecom Circles – Dec‘12 30

D. All India GSM Cellular Subscriber Base – Circle wise 31

E. All India GSM Cellular Subscribers – Annual Net Additions 31

F. All India GSM Cellular Subscribers – Metros 32

G. Tele-density (%) 32

H. Wireless Rural Subscribers as % to Wireless Subscriber Base 33

I. Market Share of Wireless Operators (March‘13) 33

J. Average Revenue Per User 34

K. Minutes of Usage Per Subscriber Per Month 34

L. Growth of Internet and Broadband Users (in Millions) 35

M. Broadband Access: Share of Different Technologies (Dec‘12) 35

N. Total Wireless Subscribers - Future Projections 36

O. Total Data Subscribers - Future Projections 36

P. India IP Traffic Growth/Top-Line 37

Q. Contribution of Telecom to Education 37

R. Contribution of Telecom to Healthcare 38

VIII. International Trends (Asia Pacific Region) 39-43

A. Subscriber Base (in millions) – Dec‘12 39

B. Subscriber Additions (in millions) during 2012, Jan‘12-Dec‘12 39

C. Wireless Penetration 40

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D. Average Revenue Per User (in USD) 40

E. Average Minutes of Usage Per Subscriber Per Month 41

F. Rate Per Minute 41

G. Data as a % of ARPU 42

H. Global IP Traffic Growth/Top-Line 42

I. EBITDA Margin 43 IX. Significant Achievements for Year 2012-2013 44-58 X. COAI Reports / Submissions 59-70 XI. COAI Media Desk 71-76 XII. Telecom Centres of Excellence (TCOE) India 77-81 XIII. Legal Update 82-86

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I. CHAIRPERSON’S MESSAGE

India and China accounted for nearly forty per cent of the global

new mobile connections in the year 2012. Clearly, India is still a

part of the big growth story in global mobile telephony. The India

mobile subscriber base stood at 865 million in 2012 and is

expected to be one billion by 2014.

Indian mobile subscriber base now contributes to over 13% of the

world mobile subscriptions of 6.5 billion. But in terms of revenue,

India lags behind miserably. Indian telecom revenue (based on

TRAI CY 2012 release) stood at USD 27 billion (Rs.1,48,792 Cr;

1 USD = Rs. 55) against broad global telecom revenue as released by GSMA & others at

USD 1,160 billion (for the same period), a meager 2.3% of global revenue.

This sharp unsustainable difference in the share of global customers & revenue is primarily

due to two reasons – world‘s lowest voice rates and hyper-competition. At less than 0.7 US

Cents per Minute (average voice rates @ 35 paisa/minute; 1 USD = Rs.55), India has the

lowest global tariffs amid intense competition with more than 6-8 operators in each service

area. The challenges of Indian mobile industry can easily be appreciated for a country,

where inspite of experiencing nearly 8% per annum inflation, the telecom tariffs have

dropped by over 30% in last four years. With Indian operators using similar international

telecom equipment at nearly constant Dollar prices across each country, the strain of

managing mobile business in a falling price environment is now clearly showing up in the

sector‘s outlook.

Indian mobile operators‘ profitability is under extreme stress. EBITDA percentage margins of

telecom companies have been showing a declining trend in the last five years. In 2012,

India‘s EBITDA margin (based on companies‘ public listing / filings in ROC) fell to the lowest

level below 15%, while the emerging Asia average for the sector stood at 36.1%. The mobile

sector, an important infrastructure industry for the growth of the economy, cannot sustain

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future investments with present unenviable low margins. Besides, Indian mobile operators

face the highest regulatory cost including service tax, license fee, graded spectrum usage

charges and revised spectrum reserve price – totaling nearly 35-40% – and a large part of

these costs could not be passed on to the consumers. With a growingly unpredictable tax

regime, the woes of the Indian operators continue to rise.

Despite low attractiveness of the sector, the industry has invested aggressively with

aggregate Gross Block now at Rs.663,000 Crore. But most investors are questioning the low

to negative Return on Investments (ROIs) of the mobile industry investments. With an ROI

which is much lower than the cost of capital, the operators were forced to be cautious while

participating in various government sponsored auctions.

The telecom sector, the poster boy of liberalization, accounts for among the highest

cumulative FDI in India at 8%, but the growing industry leverage of Rs.211,000 Crore (based

on public listing reports and filings in ROC) spend to lay India‘s telecom infrastructure

coupled with regulatory and policy uncertainty has dried up long term investments. An

appropriate definition of ‗infrastructure‘ with linked tax benefits can, to certain extent, reduce

the pain of the operators.

The obvious fall out of the financial stress and regulatory headwinds has been low

participation of Indian and global operators in the recent global spectrum auction of

November 2012 and March 2013. A few serious telecom operators have exited India and

some have reduced their presence in number of service areas.

While all above factors are applying pressure on urban and rural voice segments of mobile

business, a huge unfinished task still remains for the growth of rural voice and wireless

broadband businesses. The government‘s own estimate indicates a forty fold increase in

broadband subscriber base in the next eight years. This requires a net addition of 2.7 Mn

subscribers every month till March 2017. Broadband revolution has to connect rural India to

enable equitable and inclusive growth as the government builds synergies between its

development programs like NREGA, AADHAR, AAKASH tablet, etc.

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To achieve the vision of the National Telecom Policy 2012 as well as sustain the revenues

and margins of the sector, the Government needs to support the growth of the wireless

broadband business and rural investments in voice.

The last mobile broadband spectrum auction in the year 2010 for 2100 MHz & 2300 MHz

bands (3G) had limited quantum required for the country‘s ambitious growth plan, leading to

unsustainable spectrum prices and fragmented distribution with no pan-India 3G operator in

the private sector. With the current spectrum sharing plan announced between the

Department of Telecommunications and the Ministry of Defence in the ‗1700 to 2000 MHz

block‘, not much mobile broadband is going to be available for assignment in the future for

Indian consumers in the 2100 MHz 3G band – most around the globe. The Government

should modify the sharing plan between the two departments and make available 30-40 MHz

in the 2100 MHz band at the very earliest. This is critical if the broadband aspirations of the

country have to be realized. By its own admission, the growth of broadband services will be

a high spectrum guzzler and this hunger has to be fed.

India has become a case of limited spectrum quantum availability and high reserve price per

MHz of spectrum. There needs to be rationalization in pricing of the spectrum to be in line

with the Indian consumers‘ ability to pay for these services and attract serious investors to

invest in the business.

Besides the financial hardship, the industry last year faced other serious regulatory

challenges. EMF related concern is one such issue which calls for an industry-government

partnership to dispel all misgivings among some sections of the public. I believe the new

guidelines for telecom tower installation and the portal which makes the emission readings

transparent will go a long way in dispelling all unfounded concerns. However, much needs to

be done jointly by the government and industry to assuage the uncalled for concerns by

raised certain groups.

The recent floods and related natural calamity in Uttarakhand has shocked the nation. Our

members were equally concerned in grief of the nation and loss of life and property of our

citizens. Indian mobile operators take their corporate social responsibility very seriously and

came forward voluntarily to assist the unfortunate victims. While during the calamity a large

number of cell-sites went out of service, the members were magnanimous showing concerns

for the affected citizens quickly tied in ‗intra-circle roaming arrangements‘ with towers

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operational in the area so that customers of most operators could seamlessly call their

families. Our members also came forward to assist in identifying last known location of

missing people through their cell-site mapping as well as by crediting talktime in customers‘

accounts and setting up 24 hour helpline services.

Cellular industry has emerged as a significant sector in ensuring better life for the people at

large. Whether it is extensive use in emergency services or detecting crime related activities,

the industry has become an essential service provider for the people and the government. At

the same time, we continue to enhance the user experience by adding new features to our

services.

COAI, as the premier industry organisation has played a key role in raising the industry

issues at the appropriate forums to ensure the seamless growth of the industry. As an

industry body representing over 70% of the mobile market, we continue to be the bridge

between industry, government and user groups. We engage with not just the government

and regulators, but handle public concerns and legal disputes of the industry. We are

actively involved in creating better standards and technological excellence in this field

through our venture, Telecom Centres of Excellence.

COAI is working towards a common platform on VAS applications, KYC norms, transparency

and accountability in handling public concerns on EMF, though various joint and

independent initiatives. We are also engaged in re-branding of the organisation in tune with

the emerging realities of the industry and hope to complete the process soon.

I would like to thank all the COAI members for their support in making the activities of COAI

fruitful. Let me also thank Mr Marten Pieters, Vice Chairman – COAI, and MD & CEO of

Vodafone India, and Mr. Rajan S Mathews, Director General of COAI, for their continued

support to the make COAI the voice of the mobile sector. COAI Secretariat also deserves a

big thanks for their continuous engagement on all industry issues, ensuring attention of all of

the issues at appropriate levels.

Looking forward to another eventful year.

HIMANSHU KAPANIA

Chairman, COAI

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II. VICE CHAIRMAN’S MESSAGE

The growth story of telecom in India has been unprecedented.

The Telecom Industry, post liberalization, and even in its

nascent stage, has contributed significantly to the country,

what no other company, industry or government, has been

able to do in 100 years. Boosting its Tele-density and thereby

GDP today, India sits as the 2nd largest telecom market in the

world, thanks to the mobile revolution. Connectivity is so

important not just for keeping in touch, but also to stimulate

business and drive the economy and democracy as a whole.

Mobile technology has a huge impact on the society and

improves our quality of life. But unfortunately, the image of the industry in India has been

tarnished today. And at a time when India is in urgent need of massive investments in terms

of infrastructure—not just in terms of roads, etc. but also in terms of communication

infrastructure—the negativity that surrounds the telecom industry is not good news.

The Indian Telecom Industry has been in dire state for the past 2 years and if the situation

persists, it will only grow more and more difficult to put money into new development

projects. Not many foreign investors are ready to put money into Indian telecom players nor

are banks ready to provide financial backing except for the top players in the industry. The

shareholders are also not ready to support new ventures in the telecom sector. This industry

needs to be seen as an integral part of society, contributing extensively to nation building

and not just as a cow to be milked dry.

It is high time that the Government understands these complexities in an objective manner

and initiates measures to restore the sustainability of this vital industry. While we are aware

of a number of regulatory and policy issues, a few of them are of major concern and need to

be addressed urgently. As always, COAI has been highly instrumental in taking up these

issues and trying to address them in the best possible manner with the relevant stakeholders

involved.

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The lack of spectrum is the biggest issue we face. In India, most operators have on average

12 MHz of spectrum, whereas in Europe and other countries, operators have well in excess

of 100 MHz of spectrum. This, in spite of the fact that their population densities are

significantly lower than that of India.

In order to serve such a large customer base in India, we have different network topologies

and we need to use spectrum much more efficiently than elsewhere. This necessitates more

towers but they are costly and the general public is also worried about EMF emissions. This

may not be justified but these perceptions do exist.

It is also true that since we are accommodating so many voice calls within such little

spectrum, the quality degrades quickly when compared to international standards. I believe

that, as an industry, we need more spectrum. I think that it is in everybody‘s interest that the

operators that have the most customers and usage are allotted maximum spectrum so that

the quality can go up.

Under such circumstances, it is imperative that the industry receives the requisite support

from the government towards availability of increased spectrum at fair, market-based pricing.

Instead of the reserve prices fixed on the basis of the bids received in the 3G auction in

2010, it would be a better idea to use the base price used for the 3G auction. We would like

to reinstate that we are in favour of the auction. We think it is a transparent way of

distributing resources. But we are not in favour of arriving at a reserve price based on the

last auction. The discovered price for 3G spectrum cannot be the starting point for the 2G

auction.

COAI has been active and instrumental in expressing the concerns and elaborating on the

repercussions of the flawed spectrum auction process. In fact, COAI‘s repeated efforts in

bringing to light the implications of the Hon‘ble Supreme Court‘s judgement has brought forth

the clarification from India‘s apex court that the entire quantity of freed spectrum needs to be

put up for auction – providing some relief to the artificial scarcity of the resource which is

partly responsible for its unreasonably inflated price.

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Also, spectrum usage fees needed to be flat rather than being charged to the operator as a

share of their revenues — right now, with the government charging telcos 8-10% of their

annual revenues by way of licence fee/spectrum charges, a high entry fee would mean

telcos would be left with low EBITDA margins.

A major factor in the coming years would be the penetration and enhancement of Internet

access in the rural areas. Apart from the broadband facilities being driven by the

government, we need to work on bringing broadband Internet to rural India. People in rural

India need it more than the urban centers. Internet would open up a world of opportunity not

only in terms of entertainment but also things like healthcare and education.

Another solution catering to the financial woes of rural workers employed in cities is mobile

money transfer service. This is aimed at mobile customers who do not have a bank account

and allows them to deposit and withdraw cash via local agents, and transfer money to other

mobile phone users. In the absence of such a service, workers have to send money back to

their families in rural areas through means which are often expensive or very risky.

The introduction of 3G is driving the adoption of Internet access in India far wider than

before. The fixed line Internet penetration is far below par in India when compared with that

of similarly placed countries. The fact that 3G allows Internet access on the move drives its

usage. There is also the influence of social media which was not prevalent five years ago.

This directly drives mobile Internet adoption. We are also witnessing a new generation of

smartphones and tablets and it is suddenly far easier to access the Internet. This puts the

development story of the country on a positive course. The advent of 4G and new

technologies further enhances the promise and is expected to grow manifold in the years to

come.

The much talked about consolidation in the industry has not happened, principally as a result

of existing M&A (Mergers & Acquisitions) norms that do not favor, but in fact penalize

consolidation. Requirements to pay significantly higher amounts on the combined spectrum

by way of ―market value‖ and higher AGR slabs, poses a major disincentive. Removal of

these, plus introduction of true spectrum trading and sharing will significantly enhance M&A

activity.

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COAI has been representing the interests of the industry in the context of national policy,

with conviction and zeal and will continue to do so diligently for years to come. In fact, we

are pleased at the growing role of COAI and the enhanced eco-system that the Association

is catering to now. Whether it is the government, the media, the customers, or any other

stakeholder, COAI today is acknowledged by all as a credible thought leader of the industry,

perhaps, the most credible. I would like to congratulate the entire COAI team for their

commendable achievements and unfailing dedication towards the objectives of the industry,

which are, nevertheless, difficult under the present circumstances and thereby, even more

remarkable on the part of the Association.

On a finishing note, I would like to convey my regards to all our member operators for

working together towards all major industry issues, thus making it possible to achieve much

in the development of the industry and nation. Also, I would like to thank Himanshu for his

bold leadership and commitment towards industry issues, and the enthusiasm that he

provides. Last but not the least, I would like to thank Rajan for his able guidance and

mentorship of the dynamic Secretariat which has helped us in achieving so much, and is

expected to contribute further towards the progress of this industry.

MARTEN PIETERS

Vice Chairman, COAI

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III. DIRECTOR GENERAL’S REPORT

The telecom industry in India, which till recently was cited as

the most remarkable growth story in the world, is sputtering

today.

The sector which has been highly instrumental in escalating

the socio-economic scenario of the country to such credible

levels, is today twirling under heavy financial and

operational pressure and operators are finding business

sustainability a challenging task. While the scope and

potential of the sector remains plentiful; the lack of

supportive policies, an overly regulated system,

unreasonably high tax structures, high regulatory levies and

scarcity of key resources such as spectrum, denies the

private telecom operators healthy growth of their businesses.

While the world is talking of gigabytes and terabytes and is witnessing a technology

evolution at lightning speed, it is distressing to see the Indian telecom sector still grappling

with the issue of the allocation and pricing of basic spectrum at this stage. All those

associated with the telecom sector would agree that this is the most challenging and

unstable time we have witnessed for the telecom industry in the past several years. To

regain its position as one of the fastest growing global telecom markets, the Indian telecom

industry needs the purposeful support of the Government to remove roadblocks and instil a

nurturing environment focussed on nation building as opposed to pure maximization of

Government revenues. Amidst these perplexing times, I present the Annual Report for the

year 2012-2013.

STATUS ON POLICY AND REGULATORY ISSUES

While the National Telecom Policy 2012 (NTP 2012) articulated the Government‘s policy

direction clearly, we await the implementation of these policies in a manner that promotes

national development, increased telecom penetration especially in rural areas, broadband

availability to the masses and affordability and sustainability of the financial viability of

investors and operators.

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Over the past year we have been disappointed in the directives of the DoT to impose one-

time spectrum charges retrospectively on service operators, to disallow 3G intra-circle

roaming, to set artificially high reserve prices for spectrum auctions, to impose increasingly

large penalties even for minor infractions, to define ―spectrum refarming‖ in ways totally

foreign to any accepted methodology for the re-use of unused spectrum and to leave the

matter of license extensions under a cloud.

On the regulatory front, we have been disappointed on decisions by the TRAI that moved it

away from its stance on ―forbearance‖ on tariffs to greater intervention on pricing, even when

there was no actual or perceived breakdown or abuse of the market. However, over the past

several months, we have been heartened by the willingness of the TRAI to recognize and

address the financial condition of the industry, most particularly in its directive on VAS and

National Roaming. We continue to encourage the Regulator to consider the issue of

―cost/benefit‖ analysis in its future deliberations and directives and look forward to a period of

greater cooperation with TRAI in delivering on its twin objectives of promoting the interests

and well-being of both consumers and the industry.

On the Policy front, we are heartened by the recent decision of the EGoM (Empowered

Group of Ministers) to refer the matter of Spectrum Pricing for Auctions to the TRAI. This is a

move strongly supported by COAI. We hope the TRAI will provide a robust, analytical and

comprehensive look at the whole matter of spectrum pricing, availability, quantum and even

―refarming‖ and provide needed direction for the Government and industry.

We continue to emphasize that the Government‘s outlook should be on the benefit of all the

stakeholders in the country and all policies should be drafted only after ensuring that the

same is being fulfilled. If policies are drafted with an intention to extract as much revenue

from the sector as possible, without paying heed to the long-term objectives and the well-

being of the industry and its subsequent impact on the development of the nation, the

objective of the National Telecom Policy is entirely lost and would be reduced to a mere

ornament.

The industry requires consistent, clear, rational and transparent policies and regulations that

ensure both affordability of tariffs to consumers and a fair return on investment to operators,

thereby safeguarding the interests of all the stakeholders in the telecom fraternity. A ―light

touch regulation‖ approach that allows market forces to develop business growth would be

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beneficial for the industry, as opposed to focusing on micro-management of the sector

which, as we have seen in the recent past, often leads to counterproductive results.

In order to make the services more affordable, the crucial resource – Spectrum - should be

made available in adequate quantity and at such reasonable prices which acknowledges and

compliments the cascading impact of telecom growth and investment on GDP. No benefit

could be provided to the nation by hoarding spectrum which could be put to productive use

for the benefit of its citizens.

To cope up with the challenging times and sustain business in India, there is a pressing

need for swift and bold policy initiatives from the Government to restore investor confidence,

business sustainability and public benefit. The industry looks forward eagerly for the

Government to implement some of the forward looking policy measures enunciated in the

NTP 2012 with a balanced approach which includes the well-being of the industry.

INDUSTRY INITIATIVES AND ACHIEVEMENTS

During the year, COAI dealt with various issues of importance to the industry.

1. 2G Spectrum Auction: Pursuant to the TRAI recommendations on Auction last year,

COAI had been making various representations to the Government, Regulator,

Empowered group of Ministers, Cabinet Ministers and various other bodies dealing with

spectrum issues. COAI pointed out that the astronomical spectrum prices set for the 2G

spectrum would have a detrimental impact on the auction. We also submitted that

limiting/restricting the quantum of spectrum to be put to auction, was contrary to the

Supreme Court judgment and the same only added to the sense of uncertainty and fear

of ―irrational bidding‖ for many potential bidders. The artificial scarcity created by holding

back spectrum, combined with the high reserve price, dampened any enthusiasm for

aggressive bidding by the operators. In fact, the DoT itself acknowledged that the

auctions conducted in November were sub-optimal as very few operators participated,

large quantum of spectrum remain unsold and the Government did not realize the

revenues it was targeting. COAI had made well researched submissions on the issue of

refarming of 900 MHz band, bringing out the fallacies in the entire approach and the

misplaced assumptions around it. COAI also pointed out that there should be parity

between 800MHz and 900MHz pricing for reserve price by reducing the same for

900MHz to equal that of 800 MHz spectrum. Service operators holding licenses coming

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up for extension in November 2014, cannot be arbitrarily coerced to participate in the

900 MHz auction and the Government must honour and abide by the provisions for

license extension as contained in policy and license. COAI also recommended that as

per international norms, the e-GSM services be facilitated so that the GSM operators

could bid on the unused 800 MHz spectrum that was not bid for by the CDMA operators.

2. Additional 3G Spectrum Availability: With respect to the DoT and the Ministry of

Defence (MoD) agreeing to equally share 300 MHz in the 1700-2000 MHz spectrum

band, COAI suggested a more realistic allocation of this band so that an additional 15

MHz of spectrum could be made available for all the stakeholders including Defence and

the Indian telecom industry, without any compromise of the needs of the MoD. As per the

earlier sharing model, no more spectrum for 3G would be available from this band for the

telecom industry. COAI has made various representations to DoT, MoC, Finance

Ministry, Commerce Ministry and Defence Ministry regarding the suggested change in

sharing arrangement so that additional spectrum becomes useful for all stakeholders.

COAI is pursuing the matter with these ministries to get 3G spectrum freed for early

auction by the DoT.

3. EMF Issues: Over the past twelve months, the industry has been faced with expressions

of growing concern over the so called ―health hazards‖ of EMF from citizens citizen

groups, local and state Governments. Much of this has been fuelled by certain vested

interests bent on disseminating misleading information and claims with the objective of

profiting from concerns and anxiety generated by such activities. COAI has initiated an

aggressive campaign to counter the myths associated with EMF emissions from Mobile

towers. Professional agencies in Print, Visual and Social media were engaged to

maximise outreach and influence over the target stakeholder groups. A Tactical team

comprising of senior personnel from member companies was formed to oversee and

guide the Secretariat on the various initiatives. Many activities were undertaken under

the campaign, such as outreach programmes, association with international bodies and

experts, liaison with state and government authorities and engagement with Academia.

Even the media which had negative opinions of the subject published a more balanced

point of view after being provided with appropriate scientific studies and reports. Given

that EMF concerns are now spreading beyond the Metros, COAI is developing a national

program to address the issue.

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On the DoT front, the new norms issued by DoT based on Inter Ministerial Committee

(IMC) recommendations of reduced EMF exposure by Base Transceiver Stations have

been implemented by the industry and the Self-certification for all cell sites was provided

by all the operators by 31st March 2013, as per the new test procedures. DoT also

developed Guidelines for Issue of Clearance for Mobile Tower Installation,

―Precautionary Guidelines for Mobile Users‖ and Handbook on Mobile Communication-

Radio Waves and Safety in order to create greater awareness among the general public.

COAI provided corrective and useful inputs on all these documents and Handbook. COAI

provided various inputs to the TEC Test procedure, based on which TEC has revised the

test procedure on EMF from BTS Antennae for submission of Self- certification. DoT has

also issued an advertisement in the public interest.

The matter of what the industry perceived as ―erroneous and inappropriately high level of

penalties‖ imposed by the TERM Cells for what they interpreted as non-compliance to

the DoT/ EMF norms was taken up with Hon‘ble MoC. The Minister provided a favorable

hearing and consequently the DoT and industry are working towards a more equitable

penalty regime.

COAI made submissions to the Departmental Committee on Towers and further, on

the guidelines issued by DoT on installation of mobile towers. The objective of these

guidelines was to provide instructions and guidance to state and local Governments so

that there would be common national set of guidelines and instructions to be followed by

all state and local Governments. This is in the process of being finalized and

implemented.

In response to the Press Release by Parliament of India, Lok Sabha Secretariat, New

Delhi dated February 23, 2013 in Times of India, the COAI made detailed submissions to

the Standing Parliamentary Committee on ‗Norms for setting up Telecom Towers,

its Harmful Effects and Setting up Security Standards in expansion of telecom

facilities’ submitting that operators are fully conscious of their obligations on this issue

and are in the process of conducting audits and providing certificates to the Licensor

regarding meeting of these standards for Base Station antennae. COAI also submitted

that any conclusions and recommendations that are not based on robust scientific

research have the potential to cause undue panic in the minds of an already concerned

public and may result in serious undesirable consequences on the growth and

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sustainability of this sector and also the public policy and national telecom objectives of

the Government.

4. VAS Directive: After much fruitful discussions between TRAI and the industry and the

meetings between the TRAI Chairman and industry CEOs, a workable solution to the

vexed issue of ―Double Confirmation‖ was agreed upon. This solution was a proper

balance between the concerns of Citizens and the concerns of mobile and VAS industry.

Implementation is to be completed by June 10, 2013.

5. Combo Vouchers: The Telecom Consumer Protection Regulation, 2012 (TCPR) issued

by TRAI dated January 6, 2012 permitted only three categories of vouchers, namely

Plan Vouchers, Top-ups and Special Tariff Vouchers (STVs). Operators were not

allowed to provide monetary value bundled into the STV‘s. This had a huge financial

impact on the operators. COAI requested TRAI to allow a fourth category of vouchers

(Combo Vouchers). COAI made various submissions to TRAI highlighting the benefits of

Combo Vouchers to the subscriber. The Combo Vouchers were designed to provide

monetary value and tariff concessions through a single voucher. Considering the request

of COAI and after undertaking a consultation process on the desirability of Combo

Vouchers, the TRAI decided to permit the Combo Vouchers as a fourth category of

vouchers. This promises to resuscitate the VAS industry and revenues, which had

declined precipitously as a result of the previous ruling of TRAI.

6. Tariff for National Roaming: in response to the DoT‘s request to implement ―Free

national Roaming‖, as outlined in the policy initiatives contained in NTP 2012, and after

the consultative and deliberation process, TRAI issued its regulations. While dramatically

reducing Roaming charges on voice calls, incoming calls, SMS, etc., for the benefit of

consumers, TRAI also provided some relief to operators by proposing tariff plans that

would allow operators to recoup the cost of LD charges.

7. Premium Rate Services: TRAI specified ceiling tariff for certain categories of Premium

Rate Services (PRS). Thus, the calls made and SMS sent to participate in contests and

competitions and voting had to be charged at no more than four times the applicable

local charges. The ceiling prescribed by TRAI for these categories of Premium Rate

Services (PRS) not only had a negative financial impact on the operators but there were

technical reasons which made it difficult to comply by the operators. COAI made several

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representations to TRAI highlighting the various technical challenges in implementing it

and stated that tariff for such PRS should be kept under forbearance. TRAI vide its 53rd

amendment to the TTO dated October 1, 2013, decided to keep the tariff for calls/SMS

for participation in contests and competitions and to vote in television and radio

programmes, under forbearance.

8. Unified License: Last year TRAI also issued its recommendations on the terms and

conditions of Unified License (access services). There were certain clauses in the UL,

which the industry felt would severely impact the industry and would disturb the level

playing field and distort competition in the sector. COAI submitted its response to DoT on

TRAI‘s said recommendations stating that ―No worse off‖ principle should be applied

while finalizing the terms and conditions for the UL(AS) in order to ensure that the

existing licensees are ―no-worse off‖ under the new regime vis-à-vis the new licensees

and also the same be kept in mind for the roaming services. COAI also submitted that

the existing licensees should be allowed the choice to continue under the present

licensing regime or migrate to the new unified licensing regime based on their own

assessment of costs and benefits and both inter-circle and intra-circle roaming revenues

should be allowed for deductions from gross revenue in order to arrive at AGR. The DoT

is yet to finalize the UL and the industry is awaiting the same and is hoping that the

clauses in the UL would be finalized keeping in mind the long term sustainability of the

operators.

9. Preferential Market Access for Domestic Manufacturing: DoT issued a Notification

for Preferential Market Access (PMA) on Government procurements on October 5, 2012

and also issued a draft Notification for PMA on licensees on October 30, 2012. A Round

table Conference was organized by DeitY on April 11, 2013 with the Hon‘ble MoC&IT.

COAI represented its views stating that the industry supports domestic manufacturing

provided the targets are realistic there is healthy competition for all, no back door entry

for a specific segment, no dilution on price and quality and level playing field for all. The

Government indicated that its rationale for introducing PMA was to ensure ―national

security‖ of domestic networks. COAI pointed out that the service providers have already

been mandated to comply with the DoT License Amendment Dated May 31, 2011

related to network security. This amendment has clauses whereby all equipment in the

network has to comply with ―Safe to Connect‖ requirement. This, by itself, takes care of

all the aspects of security related to various equipment in the telecom networks. We

www.coai.in 16


believe that the attempt to link the local manufacturing to security consideration is

inappropriate, as security cannot be guaranteed simply by requiring equipment to be

manufactured in India. The concern on linkage of security to PMA has also been raised

by the Hon‘ble Prime Minister of India. COAI has made submission on the subject to

PMO also stating that the proposed PMA policy for electronics and specifically, the

manner in which this is being applied for Telecom products, be reviewed. PMA defined

by DoT, is based on unrealistic manufacturing capabilities and has not taken into

account the existing and proposed manufacturing set up and its dependence on the yet

to be established eco-system. Moreover, no country in the world is 100% self dependent,

not even China. COAI believes India cannot work in isolation on security and has to be

actively involved in international standards setting and adoption.

10. New Guidelines for Subscriber Verification: DoT issued new guidelines on Subscriber

Verification pursuant to the Supreme Court judgment dated 27th April 2012 in WPC 285

of 2010 (Avishek Goenka PIL). The guidelines have been implemented by the operators

from November 9, 2013. To spread awareness on these guidelines, COAI worked along

with the members to prepare letters (in vernacular languages) for the POS/ Retailers

explaining to them the new process, their responsibilities and legal implications. These

have been circulated to members for further circulation to their distribution chain. Posters

to be displayed at the POS/ retailer outlets outlining the responsibility of the POS and the

subscriber have also been prepared and shared with members. Nationwide

Advertisements were released in all the leading national dailies in vernacular from 14th –

17th November 2012 for customer awareness. The entire industry got together to prepare

a Common Manual on Subscriber Verification based on the new guidelines, which was

prepared in record time and has been implemented uniformly by the entire industry.

While implementing the guidelines, members expressed certain bottlenecks like

embedding of colored photographs in subscriber database, maintaining records of bulk

connections, visa requirement for neighboring countries, etc. which have been suitably

taken up with DoT.

We once again started the series of Regional Workshops, which were very productive in

the previous years. ACT organized the Workshop for the Southern region on February 5,

2013 at Hyderabad and for the Northern region on July 4, 2013 at Jaipur. The

Workshops were well attended by officials from DoT, State and Central Security

Agencies, TERM Cells and industry representatives. With the new subscriber verification

www.coai.in 17


guidelines coming into effect from November 9, 2013, there were many operational

issues, which were discussed during the workshops and certain solutions for mutual

working were proposed. The same have been captured in the Minutes of the Workshops

prepared by DoT. Some of them have been implemented by various TERM Cells.

However, on some, we are still awaiting DoT Circulars for their implementation.

11. Penalties on Non-Compliance to Subscriber Verification based on Income Tax

Slab: DoT issued a Circular to TERM Cells stating that the penalty for non-compliance

on subscriber verification should be calculated on the principles as followed in the

Income Tax Slab system. This same was directed by the TDSAT Order dated April 12,

2012. However, the same was not followed by the TERM Cells and the demands were

being raised based on the earlier practice. COAI took up this issue actively with DoT

during various meetings and apprised the senior officials even through written

submissions that the TERM Cells at circle levels are not following the TDSAT Order.

After substantial follow up by COAI, DoT has now issued this letter stating that this Order

would be applicable on all demands issued since April 1, 2009, and all new demands will

be raised as per the TDSAT Order. It is pertinent to note that this Circular from DoT has

brought the much needed relief to the industry in terms of significant reduction in penalty

imposed for non-compliance on subscriber verification. We expect this relief will translate

into substantial savings for our member companies.

12. 700 MHz Band: There were different types of proposals on the use of 700 MHz band

(both at national level as well as international level). However, during many meetings at

the national level, COAI was able to convince the Indian Administration to send a

proposal for use either for FDD or TDD and not a mix of both. COAI well represented

India during the AWF & WP5D meetings and as a result, during AWF & WP5D meetings,

the Indian delegation was at the forefront of the discussions and finally the proposal of

either FDD or TDD along with the band plan was finalized. ITU has recommended both

the band plans (only FDD or only TDD) for 700 MHz band and the same may be adopted

by various countries depending on their choice of technology. Even the TRAI has

recommended adoption of APT band plan for the 700 MHz spectrum band (698-806

MHz) with FDD based 2x45 MHz frequency arrangement. Commitment to adopt the FDD

based APT700 band plan by many countries has also started the development of eco

system for the equipment and devices and its rapid adoption and alignment with

international band plan will potentially generate even larger cost efficiencies in the

network and device ecosystems.

www.coai.in 18


13. Setting up of Telecom Testing and Certification Lab in India: Under the NSCI

(National Security Council of India), certain JWGs (Joint Working Groups) were formed.

COAI was given the responsibility of the JWG on setting up of testing and certification

lab in India. Several meetings have been held of the JWG to decide the approach on the

same. From the meetings it was decided that STQC (Standardization Testing and

Quality Certification) would take the responsibility for setting up the CC- TL and COAI

would work towards forming the TTL (Telecom Testing lab). COAI is working with Tech

Mahindra and WIPRO for the same. A report for the JWG was prepared and circulated

by COAI. The report was much appreciated by the JWG. At present Tech Mahindra

(Canvas M) and WIPRO are in talks with DoT through COAI for setting up the test facility

in India. The industry is also working on the relevant standards against which the

equipment is to be tested.

14. Indian position for ITU on International Telecommunications Regulations (ITR):

The World Conference on International Telecommunications (WCIT-12) was held in

Dubai in December 2012. The World Conference aimed to revise and update the

International Telecommunications Regulations (ITR) – Treaty – adopted at Melbourne in

1988, through everyone‘s efforts, through hard negotiations and compromises among

over 150 participating Member States. The ITRs serve as the binding global treaty

designed to facilitate international interconnection and interoperability of information and

communication services, as well as ensuring their efficiency and widespread public

usefulness and availability. COAI took a lead role in providing inputs for articulating the

Indian position on various articles in these ITRs and participated actively at the ITR

meetings. These articles dealt with such matters as the definition of

telecommunication/ICT and spam; cooperation between national administrations; giving

priority to emergency telecommunications, and how to calculate the charges for traffic

exchanged between carriers in different countries.

15. Finance Issues: The Central Board of Direct Taxes (‗CBDT‘), Ministry of Finance asked

for comments/ suggestions on the Draft Guidelines issued for implementation of GAAR

(General Anti Avoidance Rule). COAI made representation to the Parliamentary

committee and presented the issues of the industry. The Committee appreciated and

accepted more than 50% of the points included in the representation to the Government.

www.coai.in 19


COAI made representations before various forums in the Ministry of Finance, Ministry of

Telecom and to RBI with regard to inclusion of Telecom in the definition of Infrastructure.

Due to our incessant efforts, the Ministry of Finance has approved the same and now

Telecom has been included in the definition of Infrastructure. The benefits

associated with this are long term bank financing, longer moratorium period, liberalized

ECB norms and simpler compliance and longer period trade credit, etc. These will help

the companies to borrow funds for the longer period at a lower rate. We are also trying to

get more benefits covered for the telecom sector which are available to the other sectors

covered under the definition of infrastructure.

16. M-Banking: COAI continues to lead the efforts to make M-Banking a viable business

proposition for the mobile industry. The Committee constituted to draft a common

Commercial Agreement for USSD based Mobile Banking, circulated the draft on March

28, 2013. On April 18, 2013, a meeting was held at the COAI office to discuss the draft

agreement and was attended by the representatives of COAI, NPCI, AUSPI and TSPs. It

was concluded that the discussion with NPCI is no longer on the pricing aspect and

commercial agreements will be between banks and operators, with NPCI being a third

party aggregator. We have requested the DoT to block *999# for the Department of

Financial Services through National Payments Corporation of India (NPCI) instead of

*99# and keep the rest of the *99# series open for allocation for mobile banking services

through other entities/licensees. COAI continues its efforts to gain regulatory acceptance

for the ―cash out‖ option for M-Banking and for ―financial inclusion‖ for the unbanked

section of citizens.

17. SMS in Indian Languages: In the Mobile Web Community Group meeting held in

December 2012, it was proposed to test the current level of Indian Languages support at

the service layer to identify gaps. The gold SMS data and list of handsets was sent by

DIT on March 20, 2013, and the first phase of SMS testing was conducted. The Phase I

involved testing of the SMS gold data against any one of the listed

handsets. Cooperation from all members for carrying out the testing resulted in a fair

amount of samples being tested and the results documented. COAI submitted the details

of testing results received from different operators to DIT. The 4th meeting of W3C India

Community Group was held on May 14, 2013, to discuss the results of Phase 1 testing

and results were found to be satisfactory. It was decided that the testing will move to the

next phase wherein the operators would be required to undertake inter-operator testing

and submit the results. The objective of this effort is to provide SMS capability in the

local vernacular and embed this in global standards.

www.coai.in 20


18. TCOE (Telecom Centres of Excellence) initiative: The TCOEs have been effectively

working on 70 Projects over the last 5 years and have come out with 14 Patents

including 2 US patents, 14 IPRs, 49 Research Papers aiding policy advocacy and 28

Commercialization Ready Technologies. Beside these, 12 International

Workshops/Conference Expo have been conducted as a part of TCOEs mode of

operations. TCOEs along with 23 Indian Industries, 20 MNCs, 3 Industry Associations,

10 premier Academic Institutes and R&D organizations are also actively working towards

telecom standardization activities. A Simulator on Powering Cellular Base Station

developed by Reliance IIT M Telecom Centre of Excellence (RITCOE), IIT Madras won

6th Enertia Awards 2012 for ―Technology & Innovation in Renewable Energy‖. BSNL IIT K

Telecom Centre of Excellence (BITCOE), IIT Kanpur is offering comprehensive

consultancy services to organizations/enterprises wanting to migrate to IPv6. ―Digital

Mandi for the Indian Kisan‖ developed by BITCOE, IIT Kanpur has been launched on

18th June 2013 in Odisha by Hon‘ble Chief Minister of Odisha after successful operation

in Haryana.

The 8th TCOE has been established at IIT Roorkee with 100% budgetary support from

RailTel India Corporation Ltd. The centre will be known as RailTel IITR Centre of

Excellence in Telecom (RICET) and its focus area will be ―ICT & Broadband

Applications‖.

19. Telecom Sector Skills Council of India (TSSCI): COAI, as the lead promoter along

with TCOEs and ICA has set up TSSCI under the aegis of National Skills Development

Council (NSDC). TSSCI, a not for profit organization in PPP mode, will be responsible for

charting the human resource requirement in the value chain of the telecom sector. Out of

the 25 job roles identified, National Occupational Standards (NOS) for 11 job roles have

been developed and another 7 are to be completed shortly. The Government has

already funded Rs. 1.56 crores out of a total commitment of Rs. 11.6 crores to the

TSSCI. On 16th April, 2013, in the presence of the Australian High Commissioner to

India, Mr. Patrick Suckling and various other dignitaries, TSSC inked the MoUs with

IBSA & E-oz.

www.coai.in 21


OTHER ACTIVITIES OF THE ASSOCIATION

COAI remained assiduous in its endeavor to be at the forefront of national and international

mobility events held in the year 2012-13. COAI took a lead in coordinated with the DoT and

the GSMA in facilitating the visit of the Indian Government delegation to 3GSM Mobile

World Congress 2013, held in the month of February at Barcelona, Spain. The

delegation successfully represented the Indian Telecom Industry and highlighted the

immense opportunities present in the country.

COAI, in association with FICCI, coordinated an industry roundtable meeting with the

Hon’ble Secretary General of the International Telecommunication Union (ITU), Dr.

Hamadoun Toure. COAI participated as a representative of the Indian telecom industry

along with participants from the government, private companies and other association

bodies. Ideas were exchanged on the international best practices and India‘s present

scenario was discussed in this context.

COAI also organized various Seminars and Workshops on issues of interest and benefits

for its members and the industry and for creating awareness amongst the consumers. The

issues included EMF Radiation, LTE, Priority Call Routing, M-Payments, etc. COAI and its

members continued our active participation in Organization such as CII, FICCI,

ASSOCHAM, NASSCOM, GSMA, 3GPP, ITU among others, as well as activities of many

telecom events in India.

To keep pace with the growing ecosystem of a converged communications industry, COAI

continued to expand its Associate Membership by inducting new members such as IBM

India Pvt. Ltd. and Intel Corporation.

On the request of some members a sub-committee was set up to review the COAI Rules

& Regulations, especially the slab system of membership contributions. The new set

of rules and regulations have been formulated for the Association keeping in mind the

changing dynamics of the telecom industry and thus the membership of the Association.

The COAI Executive Council headed by Chairperson, Mr. Himanshu Kapania, Vice

Chairman, Mr. Marten Pieters and comprising senior representatives from all member

operators, met several times over the last year to deliberate on a variety of issues impacting

the GSM industry. They were adeptly assisted by expert advice from the various Working

Committees that had been set up in COAI.

www.coai.in 22


Many special committees and working groups formed in COAI also discussed various

issues related to certain specific projects like EMF Advocacy, Subscriber Verification and

Security Related Issues, Tower Related Issues, Preferential Market Access, etc. and

continued to work diligently on these issues.

In conclusion, I would like to thank all the Committees and Working Groups and their

Chairmen and Vice Chairmen for their proficient leadership and sincere contribution

towards various industry issues. We are grateful for their contributions towards various

industry issues and for helping the Association in representing these issues in an expert and

timely manner.

I would like to especially thank the Chairman, Mr. Himanshu Kapania, for his leadership of

the Association and his vigor in uniting the Association even in these turbulent times that we

faced last year, both from Policy as well as Regulatory perspectives and would request his

continued participation and support in all the future efforts of the industry. I also thank the

Vice Chairman, Mr. Marten Pieters for all the support and guidance that he has provided

during his tenure along with his international experience. Both of them have given

generously of their time and resources to provide personal support and guidance for the

Association.

I would like to record my indebtedness to the unfaltering efforts and support of the COAI

Secretariat team which has always been fully committed to the tasks we face and have

always been ready to take up new challenges for the Association and sail through them

smoothly. We all are aware of the time and energy they spend in contributing to each and

every project of COAI, to make it stand out and make the kind of impact that is required to

make COAI the Thought Leader for the industry. We deeply appreciate all of their efforts in

contributing significantly to all the achievements of COAI.

GROWTH DRIVERS FOR FUTURE

We hope to see much better times in the coming year with implementation of positive Policy

and Regulatory initiatives by the Government and TRAI which will have long term benefits

for the industry. As the voice market matures, telcos will shift their focus to data services,

along with value-added services. Higher mobile data services adoption will be driven by the

availability of compatible mobile devices, affordable data plans and rapidly rising internet

users.

www.coai.in 23


We believe that with positive changes, the telecom industry will see a significant growth from

core 3G to 4G, along with increase in network coverage and competition in coming years.

Along with 4G, the other two biggest drivers of this data surge will be video streaming and

cloud computing. In the near future managing this transition in the Telecom sector will be the

biggest challenge that the industry will have to face in terms of innovations and new

technology.

Machine to machine (M2M) technologies are also gearing up globally. Although it is in a

nascent stage in India currently, there is immense growth opportunity ahead. Operators who

are looking at new and profitable services will benefit greatly as M2M will provide additional

revenue streams to these providers.

The industry will also need to work closely with Government, international standards bodies,

Over the Top service providers and Civil Society in promoting security while also ensuring

the legitimate rights of consumers for privacy. While the Security interests of Government

are paramount, the costs of such initiatives and programs should not ride on the fragile

financial shoulders of service providers.

Despite the rough times now, we are hopeful that the coming years would be much better

and that a balanced approach will be adopted by the Government in the near future, keeping

in view the interests of the consumers, suppliers as well as the investor community. COAI is

committed to working closely with the government to ensure that the interests of the

customers and the investors in the industry are developed, protected and enhanced. We

also would be working on the upcoming issues in keeping pace with the world to enhance

the effectiveness of the Association as a Thought Leader in the telecom industry and

prepare it for leadership in the new century.

RAJAN S MATHEWS Director General, COAI

www.coai.in 24


IV. COAI STRUCTURE

www.coai.in 25


V. COAI SECRETARIAT

Mr. Rajan S. Mathews, Director General

Mr. Vikram Tiwathia, Associate Director General

Mr. J. Jena, Associate Director General – Special Projects

Mr. V. K. Cherian, Senior Director

Mr. Saurabh Puri, Deputy Director - Research & Analysis

Mr. Gopal Mittal, Deputy Director - Commercial & Finance

Ms. Vertika Misra, Assistant Director

Ms. Garima Kapoor, Manager

Mr. Kshem Kapoor, Manager

Ms. Amrita Anand, Manager - Legal & Regulatory

Mr. Hemant Narain, Manager - Legal & Regulatory

Mr. Kaustav Sircar, Assistant Manager – Corporate Communications

Ms. Sugandha Berry, Assistant Manager

Mr. Sahil Raina, Assistant Manager

Mr. Desh Raj Bhadana, Assistant Manager - Administration

Ms. Anandhi Nair, Senior Executive – DG Office

Ms. G Lalitha, Senior Office Executive

Ms. Sanki Lalwani, Executive

Ms. Neetu Sharma, Executive

Mr. Ramakrishna P, Principal Advisor

www.coai.in 26


TEAM COAI

The COAI team is comprised of a relatively small but eager, dynamic, experienced and

competent group of individuals who have melded together into a ―Team‖ that delivers

superior value to the industry. The work product of the Secretariat has been acknowledged

by the various Governmental departments and the Regulator for their thoroughness and

competent coverage of the issues. The Team has expanded the scope of areas covered in

response to the convergence of various industries that were previously distinct. This has

included the recruitment and integration of new Associate Members that reflect the new

converged face of the Communications industry. This in turn has required Team Members to

expand and enhance their competencies and skills to cover additional technical areas and

issues, Team building workshops, project management training, and enhancement of

interpersonal skills, along with site visits to the knowledge centers at members‘ premises are

regularly scheduled for knowledge enhancement of the team.

This year, more new faces have joined Team COAI: Mr. V. K. Cherian as Senior Director -

Communications, Mr. Hemant Narain as Manager - Legal & Regulatory, and Mr. Sahil Raina

as Assistant Manager in Communications. The team also bid farewell to

Ms. Priya S Mohindru associated with COAI since 1997 and Ms. Sweta Chauhan, Deputy

Manager, who joined us in 2011.

The Secretariat is ever thankful to the unflinching support and involvement of Committee

Chairs and all members for all its functioning.

www.coai.in 27


VI. COAI MEMBERS

1. Aircel Ltd.

2. Bharti Airtel Ltd.

3. Idea Cellular Limited

4. Unitech Wireless Pvt. Ltd.

5. Videocon Telecommunications Ltd.

6. Vodafone India Limited

1. Alcatel Lucent India Limited

2. Ascend Telecom Infrastructure Pvt. Ltd.

3. CISCO Systems India Pvt. Ltd.

A. COAI Core Members

B. COAI Associate Members

www.coai.in 28


4. Ericsson India Pvt. Ltd.

5. GTL Infrastructure Ltd.

6. Huawei Technologies Co. Ltd.

7. IBM India Pvt. Ltd.

8. Indus Tower Ltd.

9. Intel Corporation

10. Nokia Siemens Networks India Pvt. Ltd.

11. Polaris Wireless Inc.

12. Qualcomm India Pvt. Ltd.

13. Sony India Mobile

14. ZTE India Pvt. Ltd.

www.coai.in 29


VII. INDIAN GSM CELLULAR INDUSTRY – AN OVERVIEW

Source: TRAI Subscription Data and Performance Indicator report

Source: TRAI & COAI

868

525

343 359

98

Subscriber Base(Milions)Mar-2013

Urban Subscribers(Millions)Mar-2013

RuralSubscribers(Millions)Mar-2013

Minutes of UsageDec-2012

ARPU (Rs. permonth)

Dec-2012

Annual increase of

2.1%

Annual increase of

8.1%

37 59

105 172

258

380

543

671 657 661

48 76

150

234

347

525

752

894 865 868

0

100

200

300

400

500

600

700

800

900

1000

Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Mar-13

Sub

scri

ber

s in

Mill

ion

s

Total Wireless Subscribers GSM Subscribers

B. All India Total Cellular and GSM Cellular Subscriber Base

A. Growth of Wireless Industry in India

www.coai.in 30


Source: TRAI - Performance Indicator report

C. Wireless Tele-density Across Telecom Circles – Dec-2012

www.coai.in 31


Source: COAI

Source: COAI

14

20

28

38

50

66

76

75

73

20

37

62

92

12

9

18

4

22

3

22

8

23

1

19

37

62

96

14

6

21

1

26

5

26

0

26

5

5 11

19

33

56

82

10

7

95

98

0

50

100

150

200

250

300

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 May-13

Sub

scri

ber

in M

illio

ns

All Metros A' Circle B' Circle C' Circle4

6 8

10

12

17

9

-1

7

17

25

30

37

54

39

5 8

18

25

33

50

65

55

-6

3 6

8

14

23

26

24

-12

-20

-10

0

10

20

30

40

50

60

70

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12

Sub

scri

ber

in M

illio

ns

All Metros A' Circle B' Circle C' Circle

D. All India GSM Cellular Subscriber Base – Circle wise

E. All India GSM Cellular Subscribers – Annual Net Additions

www.coai.in 32


Source: COAI

Source: TRAI

0

10

20

30

40

50

60

70

80

90

Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 May-13

Sub

scri

ber

in M

illio

ns

Kolkata Chennai Mumbai Delhi

21.16 31.18

37.48 39.85 41.02

110.96

147.88

167.85

149.9 146.96

47.88

66.16 76.86 73.34 73.32

0

20

40

60

80

100

120

140

160

180

Dec-09 Dec-10 Dec-11 Dec-12 Mar-13

Tele

-den

sity

(%

)

Rural Urban Total

F. All India GSM Cellular Subscribers – Metros

G. Tele-density (%)

www.coai.in 33


Source: TRAI

Source: TRAI

22% 27% 31% 33% 34% 38%

39%

78% 73% 69% 67%

66% 62% 61%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 Mar-13

Urban Vs Total Wireless Rural Vs Total Wireless

21.7%

17.6%

14.2%

14.0%

11.7%

7.7%

6.9% 3.7% 2.7%

Bharti Airtel

Vodafone Essar

Reliance

Idea

BSNL

Tata

Aircel

Uninor

Others

H. Wireless Rural Subscribers as % to Wireless Subscriber Base

I. Market Share of Wireless Operators (Mar-2013)

www.coai.in 34


Source: TRAI Performance Indicator Report - Dec’12

Source: TRAI Performance Indicator Reports

396 370

316

261

220

144

105 96 98

0

50

100

150

200

250

300

350

400

450

2004 2005 2006 2007 2008 2009 2010 2011 2012

Ru

pee

s

302

341 368

464 496

411

360 332

359

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012

Mo

U (

in m

inu

tes)

MoU

J. Average Revenue Per User

K. Minutes of Usage Per Subscriber Per Month

www.coai.in 35


Source : TRAI Performance Indicator Reports

Source: TRAI Performance Indicator Reports

149

332

431 431

15 19

22

25

8

11 13 15

0

5

10

15

20

25

30

0

50

100

150

200

250

300

350

400

450

500

Dec-2009 Dec-2010 Dec-2011 Dec-2012

Sub

scri

ber

s (i

n m

illio

ns)

Sub

scri

ber

s (i

n m

illio

ns)

Wireless Internet Subscribers Fixed Internet Subscribers

Fixed Broadband Subscribers

84.8%

6.0%

5.2%

3.1%

0.8%

DSL

Ethernet LAN

Cable Modem

Wireless

Others

L. Growth of Internet and Broadband Users (in Millions)

M. Broadband Access: Share of Different Technologies (Dec-2012)

www.coai.in 36


Source: TRAI, COAI, Merrill Lynch Global Research Dec- 2012

Source: TRAI, COAI, Huawei

865 915 962 1010

1061

1289

0

200

400

600

800

1000

1200

1400

2012 2013F 2014F 2015F 2016F 2020F

Sub

scri

ber

s (i

n m

illio

ns)

12 47 92 143

197 249

450

2%

5%

8%

12%

15%

18%

28%

0%

5%

10%

15%

20%

25%

30%

0

50

100

150

200

250

300

350

400

450

500

2011 2012F 2013F 2014F 2015F 2016F 2020F

%

Sub

scri

be

rs (

in m

illio

n)

Subscribers Penetration

O. Total Data Subscribers- Future Projections

N. Total Wireless Subscribers- Future Projections

www.coai.in 37


Source: CISCO

Source: Analysys Mason

0.5 0.7

1

1.4

2

2.7

0

0.5

1

1.5

2

2.5

3

2012 2013 2014 2015 2016 2017

Exab

ytes

per

mo

nth

3000

4000

5000

6000

7000

8000

9000

2010 2011 2012 2013 2014 2015

To

tal E

du

cati

on

Secto

r R

ev

en

ue (

INR

b

n)

Sector Revenue

Net Growth in Education Sector

87.5%

Growth Rate

Q. Contribution of Telecom to Education

124.3%

P. India IP Traffic Growth/Top-Line

www.coai.in 38


Source: Analysys Mason

3000

4000

5000

6000

7000

2010 2011 2012 2013 2014 2015

To

tal H

ealt

hcare

Secto

r R

ev

en

ue (

INR

b

n)

Sector Revenue Sector Revenue with 10% increase in Broadband

Net Growth in Healthcare Sector Revenue - 42%

76.4%

118.4%

Growth Rate

A 10% increase in Broadband penetration leads to: 1.4% increase in GDP 37% increase in education revenue 42% increase in healthcare revenues

R. Contribution of Telecom to Healthcare

www.coai.in 39


VIII. INTERNATIONAL TRENDS (ASIAN PACIFIC REGION)

Source: Merrill Lynch Global Research Dec- 2012

Source: Merrill Lynch Global Research Dec-2012

1112

865

247

134 122 103 83 36 31 0

200

400

600

800

1000

1200

Ch

ina

Ind

ia

Ind

on

esi

a

Jap

an

Pak

ista

n

Ph

ilip

pin

es

Thai

lan

d

Mal

aysi

a

Au

stra

lia

Mill

ion

s

159.7

29.4

11.1 10.4 10.3 8.1 2.2 2.2 -8.6

-20

0

20

40

60

80

100

120

140

160

180

Ch

ina

Ind

on

esi

a

Pak

ista

n

Ph

ilip

pin

es

Jap

an

Thai

lan

d

Mal

aysi

a

Au

stra

lia

Ind

ia

Mill

ion

s

A. Subscriber Base (in millions) – Dec’12

B. Subscriber Additions (in millions) during 2012, Jan’12-Dec’12

www.coai.in 40




135% 129%

124%

105% 105% 101%

82% 71% 68%

0%

20%

40%

60%

80%

100%

120%

140%

160%A

ust

ralia

Thai

lan

d

Mal

aysi

a

Jap

an

Ph

ilip

pin

es

Ind

on

esi

a

Ch

ina

Ind

ia

Pak

ista

n

(%)

52.6

44.9

16.2

10.3 8.4

3.6 3.4 3.0 2.2 0

10

20

30

40

50

60

Jap

an

Au

stra

lia

Mal

aysi

a

Ch

ina

Thai

lan

d

Ph

ilip

pin

es

Ind

on

esi

a

Ind

ia

Pak

ista

n

AR

PU

(in

USD

)

C. Wireless Penetration

D. Average Revenue Per User (in USD)

www.coai.in 41


Source : Merrill Lynch Global Research Dec-2012


453

362 351

282

218 216

153 126

73

0

50

100

150

200

250

300

350

400

450

500C

hin

a

Ind

ia

Thai

lan

d

Au

stra

lia

Mal

aysi

a

Pak

ista

n

Ind

on

esi

a

Jap

an

Ph

ilip

pin

es

Min

ute

s

0.16

0.08

0.07

0.03 0.02

0.02 0.02 0.01 0.01

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

Jap

an

Au

stra

lia

Mal

aysi

a

Ind

on

esi

a

Ph

ilip

pin

es

Thai

lan

d

Ch

ina

Pak

ista

n

Ind

ia

Rat

e p

er M

in (

in U

SD)

E. Average Minutes of Usage Per Subscriber Per Month

F. Rate per Minute

www.coai.in 42



Source: CISCO

64%

50%

41% 38%

35%

22% 16%

0%

10%

20%

30%

40%

50%

60%

70%

Jap

an

Au

stra

lia

Ind

on

esi

a

Mal

aysi

a

Ch

ina

Thai

lan

d

Ind

ia

44

56

69

84

101

121

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016 2017

Exab

ytes

per

mo

nth

G. Data as a % of ARPU

H. Global IP Traffic Growth/Top-Line

www.coai.in 43



52%

47% 45% 43% 42%

37% 36% 32%

28%

0%

10%

20%

30%

40%

50%

60%

Ind

on

esi

a

Jap

an

Mal

aysi

a

Pak

ista

n

Ph

ilip

pin

es

Thai

lan

d

Ch

ina

Au

stra

lia

Ind

ia

I. EBITDA Margin

www.coai.in 44


IX. SIGNIFICANT ACHIEVEMENTS FOR YEAR 2012-2013

Regulatory

Security and Subscriber Verification Related Issues:

1. New Guidelines for Subscriber verification: DoT issued new guidelines on Subscriber

Verification pursuant to the Supreme Court judgment dated 27th April 2012 in WPC 285

of 2010 (Avishek Goenka PIL). The guidelines have been implemented by the operators

from November 9, 2013. To spread awareness on these guidelines, the following steps

were taken:

a. Letters (in vernacular languages) have been prepared for the POS/ Retailers

explaining to them the new process, their responsibilities and legal implications.

These have been circulated to members for further circulation to their distribution

chain.

b. Posters to be displayed at the POS/ retailer outlets outlining the responsibility of the

POS and the subscriber have also been prepared and shared with members.

c. Advertisements were released in all the leading national dailies in vernacular from

14th – 17th November 2012 for customer awareness.

While implementing the guidelines, members have been expressing certain bottlenecks

like embedding of colored photographs in subscriber database, maintaining records of

bulk connections, visa requirement for neighboring countries, etc. these have been

suitably taken up with DoT.

The entire industry got together to prepare a Common Manual on Subscriber

Verification based on the new guidelines, which was prepared in record time and has

been implemented uniformly by the entire industry.

2. Penalties on Non-Compliance to Subscriber Verification based on Income Tax

Slab: DoT has issued a circular to TERM Cells stating that the penalty for non-

compliance on subscriber verification should be calculated on the principles as followed

in the “Income Tax Slab” system which was also directed by the TDSAT Order dated

April 12, 2012. However, the same was not being followed by the TERM Cells and the

demands were being raised based on the earlier practice.

www.coai.in 45


The matter was pursued actively by COAI bringing to the notice of DoT that the TERM

Cells at circle levels are not following the TDSAT Order. As a result DoT has issued

directions to TERMS Cells, stating that this Order will be applicable on all demands

issued since April 1, 2009 and that all new demands to be raised in accordance with the

TDSAT Oder. It is pertinent to note that this Circular from DoT has brought the much

needed relief to the industry in terms of significant reduction in penalty imposed for non-

compliance on subscriber verification. We except this relief will translate into substantial

savings for member companies.

3. Extension of prepaid services in J&K, Assam and North East service areas: DoT

has extended the permission for providing pre-paid mobile services in J&K, Assam and

North east Service Areas for a period of two years w.e.f. April 1, 2013, i.e., the extension

is till March 31, 2015.

4. Guidelines for PCO: DoT wanted to issue guidelines for all the PCOs across the

country. The guidelines would consist of either maintaining a register at the POS,

wherein details of all the callers would be noted, keeping a photocopy of the ID proof of

the caller, installation of we-cameras at the PCOs, etc. COAI submitted that any effort to

impose any restrictions on the PCOs would not be viable as would only lead to

inconvenience to public and outrage amongst the PCO owners leading to closing down

of the PCO business in the country. Considering the fact that PCOs are only being used

by general public in non-availability of any other telecom facility or in case of an

emergency, it would not be in the interest of general public to impose any restriction on

the PCOs. Moreover, there would also be issues related to compliance check. DoT has

taken this into consideration and has not issued any guidelines for PCOs.

5. Setting up of Telecom Testing and Certification Lab: Under the NSCI (National

Security Council of India), certain JWGs (Joint Working Groups) were formed. COAI was

given the responsibility of the JWG on setting up of testing and certification lab in India.

Few meetings have been held of the JWG to decide the approach on the same. From

the meetings it was decided that STQC would take the responsibility for setting up the

CC- TL and COAI would work towards making the TTL (Telecom Testing lab). COAI is

working with Tech Mahindra and Underwriters Lab for the same. A report for the JWG

was prepared and circulated by COAI. The report was much appreciated by the JWG. At

present Tech Mahindra (Canvas M) and Wipro are in talks with DoT through COAI for

setting up the test facility in India. The industry is also working on the relevant standards

against which the equipment be tested.

www.coai.in 46


6. ACT Workshop: ACT Workshop for the Southern region was held on February 5, 2013

at Hyderabad. It was jointly organized by COAI and AUSPI in association with the DoT.

The Workshop was well attended by officials from DoT, State and Central Security

Agencies, TERM Cells and industry representatives. With the new subscriber verification

guidelines coming into effect from November 9, 2013, there were many operational

issues, which were discussed during the workshops and certain solutions for mutual

working were proposed. The same have been captured in the Minutes of the Workshops

prepared by DoT. Some of them have been implemented by various TERM Cells.

However, on some, we are still awaiting DoT Circulars for their implementation.

7. EMF Workshop: EMF Workshop for the Southern region was held on February 6, 2013

at Hyderabad. It was jointly organized by COAI and AUSPI in association with the DoT. It

was well attended by officials from DoT, State and Central Security Agencies, TEC,

TERM Cells and industry representatives. With the new EMF exposure limits coming into

effect from September 1, 2013, there were many operational issues, which were

discussed during the workshops for mutual resolution. The same have been captured in

the Minutes of the Workshops prepared by DoT. We are still awaiting DoT Circulars for

their implementation.

8. Workshop on technical Issues related to Priority Call Routing (PCR) in Mobile

networks for persons engaged in „response and recovery‟ work during

emergencies COAI and AUSPI in association with TRAI organized a Workshop on the

issue on November 21, 2012 to discuss the technical and regulatory issues involved in

various options involved in providing PCR. The Workshop was successfully conducted

and the technical issues were appropriately raised by the members. All concerned

stakeholders attended the Workshop and presented their views. Advisor (T), DoT was

also present for certain sessions and he appreciated the concerns raised by the industry.

9. Implementation of TRAI VAS Directive dated July 4, 2011: As per the clause 9 (i) of

the said Directive all the Service Providers were required to obtain confirmation from the

consumer through consumer originated SMS or e-mail or FAX or in writing within twenty

four hours of activation of the VAS. The impact of this Directive if implemented in full

would have been a loss of around Rs. 11000 crore for the mobile industry.

www.coai.in 47


10. Workable Solution of VAS Directive Implementation: COAI proposed a new solution

as an alternate to implementing Clause 9(i) of the TRAI Directive. The following options

were suggested by industry:

Option 1: Bringing VAS charging and subscription engine in house

Option 2: Put in place 3rd Party Consent Gateway (CG) within its own premises

The second option of 3rd party consent gateway was accepted by TRAI; however TRAI

asked all the Service Providers to have this consent gateway at the vendor‟s premises.

This requirement of TRAI to have consent gateway at the vendor‟s premises had

substantial impact on the timelines and cost for the implementation of this solution. After

several discussions with industry, TRAI agreed to the following:

All the Service Providers have to implement the 3rd Party Consent Gateway for

the second activation (managed by any third party vendor).

The Gateway can be at Service Providers premises

All Service Providers need to implement the solution by July 10, 2013.

11. Review of Tariff for National Roaming: TRAI initiated its consultation process on

“Review of Tariff for National Roaming on February 25, 2013. TRAI proposed following

approaches for the national roaming tariff Regulation:

i) Tariff for national roaming service should be under forbearance.

ii) The tariff for national roaming service should be the same as that in the home

service area i.e. Home Price Rule (HPR)

iii) The ceiling tariff for national roaming service should be reduced in line with the

current costs.

iv) The tariff for incoming calls while on national roaming should be made zero and the

costs should be recovered from the tariff of outgoing calls while national roaming.

The impact on revenue, in case approach of HPR was to be implemented, ranged from

Rs. 1800 crore to Rs. 2200 crore. COAI in its response to TRAI requested that Tariff

for national roaming service should be under forbearance to be allowed. However,

in case TRAI still feels that national roaming tariffs need to be regulated than following

approach should be adopted by TRAI;

i) The ceiling tariff for national roaming service should be reduced in line with the

current costs and TRAI should allow Special Tariff Vouchers (STV‟s) & Combo

Vouchers (CV‟s) for the roaming tariff benefits of the subscriber.

www.coai.in 48


TRAI vide TTO dated June 17, 2013 agreed to the industry's proposal and issued

following instructions:

i) Reduced Ceiling tariffs in line with prevailing market rates

ii) Allowed STV‟s and CV‟s for the roaming tariff benefits

iii) Mandated operator to offer following plans:

Roaming Tariff plan (RTP): in which the charges for outgoing voice calls and outgoing

SMS, both local as well as long distance (inter-circle), shall not change while on

roaming, however incoming calls will be charged while on roaming. There will be no

fixed charge for this plan.

Roaming Tariff plan (RTP- FR): in which the charges for outgoing voice calls and

outgoing SMS, local as well as long distance (inter-circle) and incoming calls shall not

change while on roaming. This will be in lieu of a fixed charge which can be determined

by the operator.

12. Telecom Consumer Protection Regulation 2012-Combo Vouchers (CV‟s): The

Telecom Consumer Protection Regulation, 2012 (TCPR) issued by TRAI dated January

6, 2012 permitted only three categories of vouchers, namely Plan Vouchers, Top-ups

and Special Tariff Vouchers (STVs). Operators were not allowed to provide monetary

value bundled into the STV‟s. This had a huge financial impact on the operators.

COAI requested TRAI to allow a fourth category of vouchers (Combo Vouchers). COAI

made various submissions to TRAI highlighting the benefits of Combo Vouchers to the

subscriber. The Combo Vouchers would provide monetary value and tariff concessions

through a single voucher.

Considering the request of COAI and after undertaking a consultation process on the

desirability of Combo Vouchers, the TRAI decided, through the Fourth Amendment to

the TCPR 2012, dated October 22nd 2012, to permit the Combo Vouchers as a

fourth category of vouchers with safeguards to ensure that Top Up Vouchers are

clearly distinguishable by subscribers in terms of denomination and, in the case of

physical vouchers, in terms of colour of the voucher.

Based on COAI‟s persistent request, Combo Vouchers were allowed by TRAI, which not

only gave flexibility to operators to expand their offerings but also provided more choice

to subscribers.

www.coai.in 49


13. Tariff for Premium Rate Services: The TTO 51st Amendment notified on 20.04.2012 by

TRAI specified ceiling tariff for certain categories of Premium Rate Services (PRS).

Thus, the calls made and SMS sent to participate in contests and competitions and

voting had to be charged more than four times the applicable local charges.

The ceiling prescribed by TRAI for these categories of Premium Rate Services (PRS) not

only had a financial impact on the operators but there were technical reasons which

made this TTO difficult to comply with by the operators. COAI made several

representations to TRAI highlighting the various technical challenges in implementing the

said TTO.

Considering the COAI representation in the matter, TRAI initiated a consultation process

wherein following options were placed for consultation:

i) Mandating a ceiling of Rs.3/- for calls (per minute) and per SMS made for the above

purposes/.

ii) Doing away with the tariff ceiling for such calls and SMSs.

COAI in its response to the consultation paper stated that tariff for such PRS should be

kept under forbearance.

TRAI vide its 53rd amendment to the TTO dated October 1, 2013 decided to keep the

tariff for calls/SMS for participation in contests and competitions and to vote in

television and radio programme under forbearance.

14. Metering and Billing Accuracy (Amendment) Regulations, 2013: TRAI issued

Consultation Paper on Review of The Quality of Service (Code of Practice for Metering &

Billing Accuracy) Regulations, 2006, on November 27, 2013, vide with TRAI proposed

following measures for improving the Metering and Billing Audits:

i) Imposing financial disincentives for (i) delay in filing the audit reports and action

taken reports; (ii) giving false or incomplete information in the action taken report; (iii)

giving incomplete audit report without adequate comments and (iv) delay in refunding

the excess charges levied to affected consumers.

ii) Increase in the frequency of audit of Call Data Records to twice in a year, one in

each half year, as against the present audit of once a year.

www.coai.in 50


iii) Simultaneous reporting of instances of overcharging to TRAI by the auditor and

monthly progress report on the action taken by service providers on such audit

reports.

iv) Service providers to appoint auditor based on nomination by TRAI at audit fees fixed

by TRAI.

COAI in its response to the consultation paper made following submission:

i) Authority should NOT impose any financial disincentive .

ii) Present mechanism of CDR audit i.e. 3 month period (once a year) should be

continued with.

iii) Continue with current practice of appointment of Auditor by the service providers.

iv) Increase the number of empanelled Audit firms giving greater freedom to Service

Provider for selecting the suitable auditor.

v) Current process wherein the remuneration of the auditor is determined by the lowest

bid being submitted to the operator should be continued.

TRAI agreed to the COAI submissions with regard to the i) Frequency of the Audit,

and ii) Appointment and Remuneration of the Auditor left to the operators, however

TRAI did not agree to the COAI request on imposition of the financial disincentives.

15. 700 MHz Band: There were different types of proposals on the use of 700 MHz band

(both at national level as well as international level). However, during many meetings at

the national level, COAI was able to convince the Indian Administration to send a

proposal for use either for FDD or TDD and not a mix of both. As a result, during AWF &

WP5D meetings, the Indian delegation was at the forefront of the discussions and finally

the proposal of either FDD or TDD along with the band plan was finalized. TRAI has also

recommended adoption of APT band plan for the 700 MHz spectrum band (698-806

MHz) with FDD based 2x45 MHz frequency arrangement. Commitment to adopt the FDD

based APT700 band plan by many countries has resulted in development of Eco system

for the equipment and the devices. Its rapid adoption and alignment with international

band plan will potentially generate even larger cost efficiencies in the network and huge

device ecosystems.

16. Priority call routing in Mobile networks for persons engaged in „response and

recovery‟ work during emergencies: TRAI had issued a Consultation Paper on Priority

www.coai.in 51


call routing in Mobile networks for persons engaged in „response and recovery‟ work

during emergencies. COAI requested TRAI to address the issue in a more holistic

manner, where a national plan for relief work is drawn up and the role of all people and

agencies involved is researched and identified. COAI suggested that there should be a

centralized authorization agency, identified and authorized by DoT to identify ad-hoc

relief bodies seeking interconnection without networks. TRAI had asked COAI and

AUSPI to organize a Workshop on the issue on November 21, 2012 to discuss the

technical and regulatory issues involved in various options involved in providing PCR.

The Workshop was successfully conducted and the technical issues were appropriately

raised by the members. Advisor (T), DoT was also present for certain sessions and he

appreciated the concerns raised by the industry.

17. M-Banking: The Committee constituted to draft a common Commercial Agreement for

USSD based Mobile Banking circulated the draft on March 28, 2013. On April 18, 2013,

a meeting was held at the COAI office to discuss the draft agreement attended by the

representatives of COAI, NPCI, AUSPI and TSPs. It was concluded that the

discussion with NPCI is no longer on the pricing aspect and commercial

agreements will be between banks and operators, with NPCI being a third party

aggregator. We have requested the DoT to block *999# for the Department of Financial

Services through National Payments Corporation of India (NPCI) instead of *99# and

keep the rest of the *99# series open for allocation for mobile banking services through

other entities/licensees.

18. SMS in Indian Languages: In the Mobile Web Community Group meeting held in

December 2012, it was proposed to test the current level of Indian Languages support at

the service layer to identify gaps. The gold SMS data and list of handsets was sent by

DIT on March 20, 2013 and the first phase of SMS testing was conducted. The Phase I

involved testing of the SMS gold data against any one of the listed

handsets. Cooperation from all members for carrying out the testing resulted in a fair

amount of samples being tested and the results documented. COAI submitted the details

of testing results received from different operators to DIT. The 4th meeting of W3C India

Community Group was held on May 14, 2013 to discuss the results of Phase 1 testing

and results were found to be satisfactory. It was decided that the testing will move to the

next phase wherein the operators would be required to undertake inter-operator testing

and submit the results.

www.coai.in 52


Media & PR

1. EMF Advocacy: COAI has initiated an aggressive campaign to counter the myths

associated with EMF emissions from Mobile towers. Professional conventional PR and

Digital PR agencies were engaged to maximise outreach and influence over the target

stakeholder groups. A Tactical team comprising of senior personnel from member

companies was formed to oversee and guide the secretariat on the initiative. A lot of

activities were undertaken under the campaign:

a. Outreach programmes: Programmes comprising of educational meetings with

RWAs and other citizens‟ community groups. The COAI team was successful in

eradicating the panic and untrue apprehensions in the minds of a lot of citizens‟

groups via this tool.

b. Testing of sites concerning people: COAI took the initiative to listen to the

people‟s concerns and carried out test measurements of emission levels in some

localities were concerns had been expressed by residents. One such activity was

executed in East Delhi where the COAI team carried out tests in 5 random locations

as requested by the East Delhi Bhagirathi RWA Federation and the results were

satisfactory. Similar tests were conducted in Lajpat Nagar, Defence Colony and More

such activities have been taken up on a case-to-case basis.

c. Media outreach and sensitisation: A number of meetings were held between the

COAI team and editorial teams of publications across India to sensitise them on the

facts so as to give a better understanding of the issue. This resulted in some positive

and balanced stories from publications on the matter and also prevented the

incorrect and sensationalised reporting that was being done by some of these

publications.

d. Coordination with international agencies: COAI organised meetings with

international agencies such as GSMA, ITU, etc. to understand the international

perspective on the issue and explore the best practices which could be implemented

in India.

e. Coordination with representatives from Urban Development Ministry, Govt. of

India: A team from the Urban development Ministry, developing guidelines on effects

of in-house EMF emissions sought help from COAI on relevant info and technical

aspects on the topic. COAI shared the required data and helped resolve many

queries underlying with the UD representatives.

www.coai.in 53


f. State Governments & Local Authority liaison: COAI proactively engaged the

concerned State Governments and Municipal/Local Authorities in States/regions

where there were misconceptions on the issue. The team visited and met a number

of State Secretaries, representatives of relevant ministries and relevant municipal

authorities and sensitised them on the intricacies of the issue and updated them on

the various steps already taken by the DoT and the industry in the matter. COAI was

also active in reaching out to Municipal authorities in certain states who were

exploring formulation of local guidelines for mobile towers and sensitised them on the

DoT‟s guidelines for the same which would be applicable across the country. COAI

also sought the DoT‟s assistance in this endeavour and a meeting was arranged by

DoT between Secretaries of all states to understand and discuss the issue.

g. Engaging top academia in India: COAI engaged with top academicians and

scientists to guide and support us in this campaign. Dr. Vijaylakshmi, scientist at the

Texas University interacted with a number of publications in Delhi and Mumbai on

our request, providing her expert views on the subject. Eminent IIT professors such

as Prof. Jhunjhunwala, Prof. Karandikar, and IISC professor Dr. Vasant Natarajan

were approached by COAI on the issue and we received positive feedback and

support from them. Dr. K S Parthasarathy, ex-Secretary, AERB, Govt. of India, also

continues to share his independent views on the topic.

h. Digital Media: COAI, via its Digital PR agency undertook a number of online

initiatives on the issue. COAI started its official twitter profile with EMF being a

prominent subject. A Tweetinar was also successfully organised with the technical

expert from COAI addressing the queries of the people. Studies and links of research

by credible independent agencies across the world are also being shared online via

COAI‟s profile.

i. Ghaziabad Media Interactions: It was shared by members that there were issues

concerning acquisition of new sites and sustenance of existing ones in the NCR,

especially in the Ghaziabad district. An interactive press briefing session was

organised and the media queries were satisfactorily addressed by the COAI

spokesperson. There was good media response and coverage on the activity.

j. Countering media stories on alleged “illegal towers”: A number of media reports

stating presence of alleged “illegal” mobile towers in certain cities and formulation of

local bylaws and guidelines by municipal authorities on installation and operations of

mobile towers had appeared recently. The stories wrongly linked this to EMF

www.coai.in 54


emissions from the towers as a reason. COAI reached out to these publications and

made them aware of the DoT guidelines on installation of towers and EMF emission

levels. A joint press conference was also held in Delhi in association with TAIPA to

address the confusion regarding the alleged “illegality” of towers.

2. MWC 2013 Barcelona: COAI successfully coordinated with the DoT and the GSMA in

facilitating the visit of the Indian Government delegation to the Mobile World Congress

2013 held in Barcelona, Spain. The delegation represented the Indian Telecom Industry

and highlighted the immense opportunities present in the country.

3. Roundtable Meeting with ITU General Secretary Dr. Hamadoun Toure: COAI, in

association with FICCI, coordinated an industry roundtable meeting with the Hon‟ble

Secretary General of the International Telecommunication Union, Dr. Hamadoun Toure.

COAI participated as a representative of the Indian telecom industry along with

participants from the government, private companies and other association bodies. Ideas

were exchanged on the international best practices and India‟s present scenario was

discussed on the context.

4. Dedicated Column in Voice & Data Magazine: COAI has connected with Voice & Data

Magazine to come out with a dedicated monthly column from COAI. A dedicated

authored article from COAI on an industry issue of our choice will be published every

month in the magazine.

5. 2G Spectrum auction issue: The 2G auctions ended just as COAI had predicted, with

limited players coming into the market to bid, and extremely muted bidding with several

circles having no bidders at all. This reinstated COAI‟s views on the auction that an

artificially high reserve price that bore no congruence to market realities was the key

reason for the failure. Also, COAI‟s repeated efforts in bringing to light the implications of

the Supreme Court‟s judgement brought forth the clarification that the entire quantity of

freed spectrum needs to be put up for auction.

www.coai.in 55


Finance

1. General Anti Avoidance Rule („GAAR‟): The Central Board of Direct Taxes („CBDT‟),

Ministry of Finance sought comments on the Draft Guidelines issued for implementation

of GAAR. Industry concerns and issues were highlighted in a submission made by COAI

o the Parliamentary committee in the matter. The COAI representation was commended

and most of the important points were included in the Parliamentary report submitted to

the Government.

2. Goods & Service Tax: Finance and Commercial Committee made various

representations on Goods & Service Tax (GST), to TRAI, DoT, MoF etc. and is closely

working with the Government to formulate a GST model which will be industry friendly.

3. Entertainment Tax in MP. Government of MP imposed entertainment services for

the telecom industry: COAI made representation to the Addl. Commissioner of MP on

entertainment services for the telecom industry. COAI delegation met with the

Finance Minister, MP as well as various other senior officials of MP Government and

appraised them about the heavy duties and levies on the telecom sector and also

discussed about the practical problems for the implementation of the same. Now COAI is

again going to file the letter before the authorities mentioning the non-applicability of

entertainment tax. (Few members have already filed petition in the High Court

challenging the applicability of entertainment tax based on the constitutional grounds).

4. Felicitation Ceremony for Shri. V.K.Garg: On August 07, 2012, COAI Finance &

Commercial committee held an event to felicitate Shri V K Garg, Joint Secretary, Tax

Research Unit, Department of Revenue for his valuable time and support given to the

industry.

5. Representations made before the RBI and Joint Secretary (I&I),Department of

Economic Affairs, Ministry of Finance, New Delhi for extension of RBI circular‟s No. 28

issued on 25th January, 2010 and partial modification of RBI circular No. 134 issued on

25th June, 2012 and request for the following.

Allow the telecom operators to refinance their outstanding rupee loan, initially availed

for the payment of 3G spectrum, with ECB by extending the initial period of one year

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window vide RBI Circular No. 28 by another six month from the date of your

permission.

Expand the scope of capital expenditures mentioned in circular # 134 to include the

payment of past/future license and/or spectrum fees to the Government of India.

Widen the source of repayment of ECB to include many other available sources

instead of permitting export earning only as a valid source of repayment vide RBI

circular No. 134 as it would not give a chance to any domestic telecom operators

practically to derive any benefit out of the said circular.

Recently on June 25, 2013, RBI has approved the same and issued circular No. 114

and has reviewed its ECB policy for 3G spectrum allocations and has extended the

ECB window for financing 3G spectrum rupee loans, that are still outstanding in

telecom operator‟s books of accounts, will be open upto March 31, 2014.

6. Infrastructure Status for the Sector : Representations made before the various

forums in the Ministry of Finance, Ministry of Telecom and to RBI, on circular #

DBOD.BP.BC.No. 58/08.12.014/2012-13 dated 20-11-2012 on infrastructure lending

which has revised the definition of infrastructure lending restricting the same to

telecommunication (fixed network) as the only telecom segment qualified for lending

under „infrastructure status‟ and requested them to favourably review and consider

restoring earlier wider definition of telecommunication services in the infra lending sub

sector.

Based on the various representations and the various follow-ups with them with regard to

inclusion of Telecom in the definition of Infrastructure, Ministry of finance has approved

the same and have included Telecom in the definition of Infrastructure. With the inclusion

of Telecom in the definition of Infrastructure, some expected benefits to the sectors are :

Long term bank financing,

Longer moratorium period,

Liberalised ECB norms,

Simpler compliance and longer period trade credit, etc.

Above will help the companies to borrow the funds for the longer period at a lower rate.

COAI is also working towards availing benefits for the Telecom sectors which are presently

available to the other sectors, covered under the definition of infrastructure. These benefits

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are mainly reduction in Import & exemption in Excise duties, Electricity Supply for

Telecommunication, Lower Insurance Premiums etc.

7. Tax Residency Certificate (TRC): In the M/o September 2012, through the notification

dated 17-9-2012, the CBDT specified the format in which the TRC has to be obtained

from the Government or the specified authority in the respective country by the resident

of a contracting state to claim any treaty benefits in India. Prior to the said amendment in

law, there was no prescribed format or guidelines and, the certificate could be issued by

the resident of the contracting state, himself. Thus a self-declaration by the resident,

confirming the tax residence status, along with any supporting evidence, was adequate

for the purpose of extending the treaty benefits. This had led to significant hardship to

the domestic assesses. COAI made the representations to the Ministry of Finance for the

same.

Recently while finalising the Finance Bill in the Parliament, the Government has

substantially rolled back the provisions relating to TRCs. This Bill has now been

approved by the President of India.

As per the new changes, for claim of treaty benefits, Non-resident taxpayers would

now only be required to obtain a TRC from their home country (i.e. the requirement

of obtaining a TRC containing prescribed particulars has been rolled back). The tax

authorities may however, call upon any other inform documents/ information, as may

be prescribed.

These amendments will bring a huge relief to the entire industry as in the absence of

the proper TRC, the payer would have been required to withhold tax as per Indian

Income Tax Laws and passing the benefit of DTAA would have not been possible.

Apart from the saving of administrative hassle for seeking PAN of the payee, issue of

certificate, penalty in case of not having PAN etc. this would have results in

increasing cost for the payer as most of the foreign parties / vendors wants money

net of taxes.

8. Apart from the above, COAI F&C Committee made representation by way of Pre and

post Budget recommendations requested to consider the following points.

a. High duties and Levies on the sector.

b. Reverse Charge Mechanism – Delay in CENVAT Credit availment.

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c. Delayed payment to foreign vendors should include - no interest if tax is paid by the

company & cenvat should be available on reverse charge basis if tax is paid only.

d. Bad debt write off should reverse service tax liability also.

e. Cenvat on scanned documents - originals to the extent reqd can be provided at the

time of audit.

f. Input & Input services : Amendment in definition in Cenvat rules to clearly allow

credit on towers and tower parts.

g. VAS – Service Tax or VAT.

h. Supply of Software of Software – Service or Sale.

i. Entertainment: Scope given under Negative list to be aligned with Entertainment tax

law.

j. Under 40a(ia) - payment to non-residents may not be on the same footing for tax

benefit purposes since the NR may not deposit tax in India unless he has a PE.

Form.

k. 60/61 the new documents like AAdhaar etc. should be included and this should be

dropped.

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X. COAI SUBMISSIONS, REPORTS AND WHITE PAPERS

COAI submissions to TRAI

1. QoS for mobile data services: TRAI in its efforts to monitor Qos for mobile data services

had issued a draft regulation. Industry has provided comments on the same stating that

data services are still in the nascent stage At this stage, to prescribe stringent standards

for measuring and achieving benchmarks for data services, be it for 2G, 3G, EVDO or

BWA, would be premature. We may as a market exchange the experience and growth in

demand however, achieving stringent benchmarks on a predominant voice network will

impact the future development and growth of networks. Hence, we suggested at this

stage we should track the growth of data services to make a more informed regulation

which will serve the consumers and protect the interest of all stakeholders including

service providers. However, TRAI has not taken into account the representations made

by the industry and have issued a final regulation in this regard and have sought reporting

from December quarter onwards. COAI has once again written to TRAI about the

technical reasons because of which the TRAI regulation cannot be met.

2. COAI SUBMISSION ON INCREASE IN TERMINATION CHARGE ON INCOMING

INTERNATIONAL CALLS: COAI made submission to TRAI highlighting that the

termination charge for international incoming traffic, needs to be increased. TRAI may

conduct study on market and other related aspects in this regard. However, the prevailing

rate of 40p rate continues to be a case of Indian operators subsidizing the calling costs for

international operators which ultimately is impacting the Indian consumers. COAI

requested TRAI to increase the termination rate on incoming ILD calls to Re.1 per minute.

3. COAI SUBMISSION TO DOT ON THE TRAI RECOMMENDATION ON THE

“APPLICATION SERVICES”: COAI made following submissions on the TRAI‟s said

Recommendations:

a) The rapid expansion of unique and innovative Application services should not be

stifled through over-prescriptive licensing and regulatory provisions. This will be in the

best interest of consumers and of the rapid growth of mobile Application Services and

innovations for development and evolution of new Application Services.

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b) The present arrangement wherein the Application providers are providing their

services through telecom service providers has worked well and has resulted in the

growth of the Mobile Application services market.

c) Any kind of licensing of VAS services would be a huge impediment to the growth of

this sector. Creating a new category of licenses would only be an administrative

problem and not in the interests of the VAS sector.

4. IMPACT OF TRAI’S SPECTRUM RECOMMENDATION ON CONSUMERS AND

INDUSTRY - PWC ASSESSMENT OF TRAI RECOMMENDATIONS, VOLUME II

In July 2012, TRAI published an analysis of the effects of its recommendations on the

auction of spectrum on costs, tariffs and financial returns. In continuation of our earlier

PwC paper on “Impact of TRAI recommendations on consumers and industry”, published

in April 2012, we conducted the second volume of the study with PwC in July 2012.

PwC‟s assessment of TRAI‟s report indicated that TRAI‟s analysis when corrected for

given considerations leads to a projected per minute tariff impact to the tune of 44 paisa

compared to 8.6 paisa as estimated by TRAI in its Track I calculations which presume

that all existing spectrum allocations would be re-priced at reserve/auction price for a 10-

year tenure at the time of license extension. We estimate a tariff impact to the tune of 60

paisa as compared to 9.4 paisa calculated by TRAI under Track II which assumes that all

existing spectrum allocations would be repriced at a reserve/auction price in the year

2012-13 for 20-year tenure. The potential tariff impact was assessed by calculating pass-

through of cost impact with added impact of license fees, spectrum usage charges and

service tax. The report highlighted that Indian mobile operators‟ financial performance

will be impacted by the recommendations due to the proposed heavy spectrum costs. In

the past, operators have had some ability to absorb cost increases but the industry does

not have the capacity to do so now, given their eroding profit margins, returns below the

cost of capital and unsustainable debt service burdens.

5. COAI SUBMISSION ON TRAI’S CONSULTATION PAPER ON REVIEW OF

PROCESSING FEE ON TALK TIME TOP–UP VOUCHERS AND CHARGES FOR

PREMIUM RATE SERVICES:

a) Review of Processing Fee on Talk Time Top–Up Vouchers: COAI in its

submission on the processing fee submitted that ideally the processing fee on top up

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vouchers should be under forbearance. However if at all it needs to be mandated, it

should be fixed at a ceiling of INR 3 irrespective of the MRP of a voucher.

b) Charges for Premium Rate Services: COAI in its response to the consultation

paper stated that tariff for such PRS should be kept under forbearance. COAI also

highlighted various technical challenges in implementing any ceiling for the Premium

Rate Services.

6. COAI SUBMISSION ON THE TELECOM CONSUMER PROTECTION REGULATION

2012 - COMBO VOUCHERS (CV’S): COAI in its response to the consultation Paper

submitted the issue of Unsoliciated Commercial Communications (UCC) could only be

tackled effectively through a legislation enacted by Parliament, similar to the privacy laws

in some of the countries. Further, COAI requested TRAI to prescribe a regulation which

is conducive, so that the bulk calling and SMS sending entities should find value in

registering as a Telemarketer.

7. COAI SUBMISSION ON TRAI’S CONSULTATION PAPER ON REVIEW OF THE

TELECOM COMMERCIAL COMMUNICATIONS CUSTOMER PREFERENCE

REGULATIONS, 2010: COAI requested TRAI to allow a fourth category of vouchers

(Combo Vouchers). COAI in its submission to TRAI highlighted the benefits of Combo

Vouchers to the subscribers since they provide monetary value and tariff concessions

through a single voucher.

8. COAI SUBMISSION ON DRAFT TELECOMMUNICATION MOBILE NUMBER

PORTABILITY (FOURTH AMENDMENT) REGULATIONS, 2012 – FINANCIAL

DISINCENTIVE: In its response COAI suggested that TRAI should follow an approach

similar to QoS, wherein the thresholds are defined and performance of operators is

measured against the same. Once the QoS benchmarks are in place, TRAI should

analyze quarterly trends and if any operator fails to repeatedly meet the specified

benchmark and TRAI is not satisfied with the reasons explained by the service provider

then a suitable action may be considered.

9. COAI SUBMISSION TO THE TELECOMMUNICATION TARIFF (FIFTY SECOND

AMENDMENT) ORDER, 2012: – FINANCIAL DISINCENTIVE: COAI vide its response

to the draft TTO requested TRAI not impose any financial disincentive on reporting

requirements for filling the tariffs, as delay (if any) happen because of the large volumes

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of tariffs plans that need to be filed on a pan India basis. Further, COAI proposed that

TRAI should discontinue with Tariff filing through „Hard Copy‟ and introduce e-filing

process. This will address the issues of logistics and bring in efficiency to the whole

process.

10. COAI SUBMISSION TO THE DRAFT SECOND AMENDMENT TO THE STANDARDS

OF QUALITY OF SERVICE OF BASIC TELEPHONE SERVICE (WIRELINE) AND

CELLULAR MOBILE TELEPHONE SERVICE REGULATIONS, 2009 (7 OF 2009) ON

FINANCIAL DISINCENTIVES: COAI vide its response to the draft amendment stated

that TRAI should progressively move towards a regime of light touch regulation for

quality of service benchmarks rather than introducing financial disincentives on the

service providers for not meeting the benchmarks of various QoS parameters – many a

times it is seen that these are for reasons which are beyond service providers‟ control.

Further, COAI submitted that the need to provide best in class services to the customers

arises out of market compulsion rather than a regulatory mandate and therefore, it

should be left to market forces /self-regulation.

With regard to the issue of financial disincentive, COAI submitted that measure of

imposing „financial disincentive‟ on the service providers for not meeting the Quality of

Service (QoS) benchmarks as prescribed by the TRAI is in the nature of a penalty. The

provisions of the TRAI Act 1997 (amended 2000) do not empower the Authority to

impose a penalty and the Authority may only through an Amendment in the TRAI Act,

seek to include necessary powers to levy financial disincentive / penalty on service

providers for any violation under the license.

11. Universal Single Number Based Integrated Emergency Communication and

response System: TRAI issued a consultation paper on the subject to which COAI

responded stating that there should be a communication network in place which

facilitates the people in distress to access the concerned agencies from anywhere, at

any time and get a proper and immediate response. 100 should be the preferable

number for this use and Government should bear the cost of setting up centralized

server for this.

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12. COAI SUBMISSION TO TRAI ON THE TELECOM COMMERCIAL

COMMUNICATIONS CUSTOMER PREFERENCE REGULATIONS, 2010: COAI vide its

letter to TRAI suggested the following alternative solution to tackle the menace of the

unregistered telemarketers:

a) Effective Legislation through Parliament

b) Differential retail tariffs after certain number of SMS per day

c) Disconnection of the Bulk Connection in case of violation

13. COAI SUBMISSION ON TRAI CONSULTATION PAPER ON DEACTIVATION OF THE

SIM’S DUE TO THE NON-USAGE: Through its response to the said consultation paper

COAI requested TRAI to make the following recommendations to DoT:

a) DoT should accept TRAI‟s recommendations to utilize the levels reserved for fixed

line services which are registering negative growth – this will free up the much

needed resources for additional number series to be allocated for mobile services

which has been registering very high growth levels across the country and has

already crossed 900 million customers (end Oct 2012).

b) Given the cancellation of licenses by the Honorable Supreme Court, DoT should, at

an early date, initiate the process of reallocating the number series thus being

released / freed up.

c) Once an application for new blocks is made by the service provider, it should be

processed and allocated to the service providers within 7 working days of the date of

submission of application to DoT.

14. COAI SUBMISSION ON METERING AND BILLING ACCURACY (AMENDMENT)

REGULATIONS, 2013: COAI in its response to the consultation paper made following

submission:

a) Authority should NOT impose any financial disincentive.

b) Present mechanism of CDR audit i.e. 3 month period (once a year) should be

continued with.

c) Continue with current practice of appointment of Auditor by the service providers.

d) Increase the number of empanelled Audit firms giving greater freedom to Service

Provider for selecting the suitable auditor.

e) Current process wherein the remuneration of the auditor is determined by the lowest

bid being submitted to the operator should be continued.

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15. COAI SUBMISSION TO DOT REGARDING INDIAN POSITION SUBMITTED TO

INTERNATIONAL TELECOMMUNICATION UNION (ITU) ON INTERNATIONAL

TELECOMMUNICATIONS REGULATIONS (ITR):The World Conference on

International Telecommunications (WCIT-12) was held in Dubai in December 2012. The

World Conference aimed to revise and update the International Telecommunications

Regulations (ITR) – Treaty – adopted at Melbourne in 1988 through everyone‟s efforts

through hard negotiations and compromises among over 150 participating Member

States. The ITRs serve as the binding global treaty designed to facilitate international

interconnection and interoperability of information and communication services, as well

as ensuring their efficiency and widespread public usefulness and availability.

COAI took a lead role in providing inputs for articulating the Indian position on various

articles in these ITRs and participated actively at the ITR meetings. These articles dealt

with such matters as the definition of telecommunication/ICT and spam; cooperation

between national administrations; giving priority to emergency telecommunications, and

how to calculate the charges for traffic exchanged between carriers in different countries.

16. COAI SUBMISSION ON TRAI’s CONSULTATION PAPER ON “DEFINITION OF

ADJUSTED GROSS REVENUE (AGR) IN LICENCE AGREEMENTS FOR PROVISION

OF INTERNET SERVICES AND MINIMUM PRESUMPTIVE AGR” : COAI in its

response to the consultation paper made following submission:

a) The proposed consultation should focus only on the definition of AGR and not on

other terms and conditions of the license agreement, such as the scope of the work,

roll-out obligations etc.

b) The license terms and conditions should be in line with the terms and conditions of

NIA dated February 25, 2010 issued at the time of 3G/BWA auction and while TRAI

can review the definition of AGR, the scope of licence of ISP should essentially stay

unaltered.

c) Revenues which do not accrue from services should not form a part of AGR for ISPs

d) The scope of service/sales tax deduction allowed under license presently should be

extended to include the entertainment tax as well.

e) All the deductions for ISP‟s should be on accrual basis.

f) Deductions to ISP‟s should apply for resources taken from other telecom service

providers to deliver services.

g) A Minimum Presumptive AGR should only be applicable on ISPs that have acquired

Access Spectrum resources.

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17. COAI SUBMISSION ON TRAI DIRECTIVE ON VALUE ADDED SERVICES: COAI vide

its said submission proposed a new solution as an alternate to implementing Clause 9(i)

of the TRAI Directive. The following options were suggested by industry:

Option 1: Bringing VAS charging and subscription engine in house.

Option 2: Put in place 3rd Party Consent Gateway (CG) within its own premises .

18. COAI SUBMISSION TO DOT ON TRAI RECOMMANDATIONS ON “ TERMS AND

CONDITIONS OF UNIFIED LICENSE (ACCESS SERVICES): COAI in its response to

DoT on TRAI‟s said recommendations made following submissions:

a) “No worse off “principle should be applied while finalizing the terms and conditions

for the UL(AS) in order to ensure that the existing licensees are “no-worse off” under

the new regime vis-à-vis the new licensees.

b) Existing licensees should be allowed the choice to continue under the present

licensing regime or migrate to the new unified licensing regime based on their

own assessment of costs and benefits.

c) The scope of the work for the Roaming services should also be in line with No worse

off Principle i.e. the definition of roaming should not be narrowed down in the unified

licensing.

d) Both inter-circle and intra-circle roaming revenues should be allowed for deductions

from gross revenue in order to arrive at AGR.

e) No new conditions should be added in the license or WOL agreements.

19. COAI SUBMISSION TRAI PRE-CONSULTATION PAPER ON “FULL MOBILE

NUMBER PORTABILITY”: COAI in its response to the Pre-consultation paper made

following submission:

a) Commercial Viability: there is not enough market driven demand for this type of

service (nationwide MNP), and hence this does not appear to be a commercially

viable option.

b) Cost Benefit Analysis: a detailed cost benefit analysis should be undertaken and

included in the proposed Consultation Paper.

c) Fixed line Number Portability and the Service Number Portability: Detailed cost

benefit analysis for the implementation of fixed line and service number portability

should be undertaken and should form part of the proposed Consultation Paper.

d) In the interest of avoiding complexity and ensuring minimum possible changes to the

prevailing stable MNP architecture, TRAI may consider adopting Approach 1( i.e

Recipient Operator forwards the porting request to the MNP service provider of

his zone) for implementation of Full MNP.

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20. COAI SUBMISSION ON TRAI’S CONSULTATION PAPER ON REVIEW OF TARIFF

FOR NATIONAL ROAMING: COAI in its response to TRAI requested for following

approach to be followed :

a) Tariff for national roaming service should be under forbearance.

However , in case TRAI still feels that national roaming tariffs need to be regulated

then the ceiling tariff for national roaming service should be reduced in line with the

current costs and TRAI should allow Special Tariff Vouchers (STV‟s) & Combo

Vouchers (CV‟s) for providing roaming tariff benefits to the subscribers.

Spectrum Issues

1. 2G Spectrum Auction: Pursuant to the TRAI recommendations on Auction last year,

COAI had been making various representations to the Government, Regulator,

Empowered group of Ministers, Cabinet Ministers and various other bodies dealing with

spectrum issues. COAI pointed out that the astronomical spectrum prices set for the 2G

spectrum would have a detrimental impact on the auction. In fact, the DoT itself

acknowledged that the auctions conducted in November were sub-optimal since very few

operators participated, large quantum of spectrum remain unsold and the Government

did not realize the revenues it was targeting. COAI had made aggressive submissions of

the issue of refarming of 900 MHz band bringing out the fallacies in the entire approach

and the misplaced assumptions around it. COAI also submitted that there should be

parity between 800MHz and 900MHz pricing for reserve price by reducing the same for

900MHz to equal that of 800 MHz spectrum. Licensees coming up for extension in

November 2014 cannot be arbitrarily coerced to participate in the forthcoming auctions

and the Government must honour and abide by the provisions for extension as contained

in policy and license. COAI also suggested that as per international norms, the e-GSM

services be facilitated so that the GSM operators could use the unused 800 MHz

spectrum that was not bid for by the CDMA operators.

2. 3G Spectrum Availability: With respect to the DoT and the Ministry of Defence (MoD)

agreeing to equally share 300 MHz in the 1700-2000 MHz spectrum band, COAI

suggested a more realistic sharing of this band so that it becomes useful for all the

stakeholders including Defence and the Indian telecom industry. As per the earlier

sharing model, no more spectrum for 3G would be available for the telecom industry.

COAI has made various representations to DoT, MoC, Finance Ministry, Commerce

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Ministry and Defence Ministry regarding the suggested change in sharing arrangement

so that the spectrum becomes useful for all stakeholders. COAI is pursuing the matter

with these ministries to get 3G spectrum freed for early auction by the DoT.

3. WPC & SACFA Related Issues: Operators were facing a lot of issues with WPC

regarding implementation issues on Interference, Jammers, AAI Compliance and other

SACFA related issues. WPC has also stopped issuing operating licenses to operators.

COAI had organized an open house discussion with WPC and DoT on Dec 27, 2012.

DoT and WPC listened to all the industry issues and have started working towards

resolution of some of these issues. In this regard, COAI had also organized a meeting

with JCES on Jan 17, 2013 to discuss problematic issues with the industry regarding

clearance of sites.

EMF - Radio Communications’ and Tower Related Issues

1. EMF Issues with DoT/ TEC

a. The new norms issued by DoT based on Inter Ministerial Committee (IMC)

recommendations of reduced EMF exposure by Base Transceiver Stations have

been implemented by the industry.

b. Thereafter, DoT developed Guidelines for Issue of clearance for Mobile

Tower Installation, Precautionary Guidelines for Mobile Users and Handbook on

Mobile Communication- Radio Waves and Safety for contributing in creating

awareness among the general public.

c. COAI provided the inputs on all these documents and Handbook was being revised

as few erroneous statements were highlighted in the same.

d. COAI provided various inputs to the TEC Test procedure, based on which TEC has

revised the test procedure on EMF from BTS Antennae providing the procedure for

submission of Self- certification. Some of the industry inputs were considered and

incorporated in the document like the radius of 20 meters for estimating the

compliance is made same as earlier test procedure and mention on the Type of

detection (unperturbed rms values) in the reference level.

e. The Self-certification for all cell sites was provided by all the operators by 31st March

2013 as per the new test procedure.

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f. The Field Units of DoT (TERM Cells) started levying penalties on procedure and

administrative issues. The issue was aggressively taken up by COAI with the MoC as

well as DoT and is now getting resolved.

2. Inputs to BTS Tower Committee & Guidelines for Installation of Towers: COAI

made submissions to the Departmental Committee on Towers and further the guidelines

issued by DoT on installation of mobile towers. The submissions included single window

clearance in states / local bodies to accord approval for BTS tower installations to avoid

undue hardship to telecom service providers, issues related to structural safety, no

restrictions on installation of mobile towers on schools and hospitals, etc.

3. Submission to Parliamentary Standing Committee on EMF: In response to the Press

Release by Parliament of India, Lok Sabha Secretariat, New Delhi dated February 23,

2013 in Times of India, the COAI made detailed submissions to the Committee

submitting that operators are fully conscious of their obligations on this issue and are in

the process of conducting audits and providing certificates to the Licensor regarding

meeting of these standards for Base Station antennae. COAI also submitted that any

conclusions and recommendations that are not based on robust scientific research have

the potential to cause undue panic in the minds of an already concerned public and may

result in serious undesirable consequences on the growth and sustainability of this

sector and also the public policy and national telecom objectives of the Government.

Security Issues

1. Location Based Services: The requirement of LBS came from DoT in its license

amendment dated May 31, 2011. For the past 1.5 years, operators had explored various

options to meet the stringent DoT mandate on LBS and have suitably represented to

DoT as well as the TEC the technical shortcomings, regulatory issues involved as well as

cost implications. There was no movement on the issue for quite some time, however, in

February 2013, DoT once again called a meeting of the operators to get a status check

and sought the progress of the operators. In response the industry emphasized that such

conditions on Location Based Facility have never been accepted by the industry and

have been repeatedly objected to, pointing out that the targets/accuracies specified by

DoT are not possible to be achieved given the current state of art and near future

technology maturity. The industry also submitted that in the absence of availability of any

vendors to implement DoT requirements of LBS, the industry believes that the best

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possible solution is the ECGI based solution and hence would like to voluntarily use this

methodology for providing location details for an all India basis. The same would be

implemented on a Pan-India basis by end September 2013.

2. TEC Guidelines on Mandatory Testing of Telecom Equipment in India: COAI made

submissions to TEC that Security/Safety of telecom equipments is well covered under

the license amendment of DoT dated May 31, 2011. As per this amendment, the network

elements inducted in the network are asked as “safe to connect” with heavy penalty

provision in case of breach with including certification compliance to Global Standards.

The proposed process does not ease the testing or certification system but on the

contrary makes these more cumbersome. The proposed mandatory testing for all

categories/elements of telecom equipment in the country/prior to sale/use may involve

significant delays in processing by Government besides significant additional costs by

way of testing/certifications/Registration. These aspects may adversely affect the rapid

growth of telecom network of the country. It was emphasised that there is a need to have

more Mutual Recognition Agreements (MRA). TEC or any other Government of India

(GoI) agency shall work to execute MRAs with various national and international

laboratories to accept conformity assessment/ certifications done by the mutually

recognised laboratories.

3. Development of SIM card operating system and leveraging Mobile devices: A draft

Report on SIM & Mobile Devices issued by Expert Committee constituted on

Development of SIM Card Operating System and Leveraging Mobile System was

circulated to stakeholders for inputs. COAI provided its preliminary comments on the

report stating that the subject requires more detailed interaction with OEMs. COAI

submitted that the Committee observes that any application that is not owned by TSPs

should not be under the purview of Compliance requirements for the TSP. Similarly the

guidelines should apply to the respective owner of the application developer for

compliance to the standard API. It is well understood that the context of security and

identity of the subscriber is tied only to the SIM. The specifications and the security chain

around the SIM is defined by the MNO; therefore, it is of utmost importance that these

security requirements are clearly defined by / for the MNOs. Such definitions should

necessarily cater to the value added transactional applications meant for the rural

masses as such applications may also have an impact on the SIM storage, application

space and any specific technical requirement.

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Regulatory Issues

1. Preferential Market Access: DoT issued a Notification for PMA on Government

procurements and also issued a draft Notification for PMA on licensees also. A Round

table Conference was organized by DeitY on April 11, 2013 with the Hon‟ble MoC&IT.

COAI represented its views stating that the industry stands for domestic manufacturing

provided there is healthy competition for all, no back door entry for a specific segment,

no dilution on price and quality and level playing field for all. The service providers have

already been mandated to comply with the DoT License Amendment Dated May 31,

2011 related to network security. This amendment has clauses whereby all equipment in

the network has to comply with “Safe to Connect” requirement. This, by itself, takes care

of all the aspects of security related to various equipment in the telecom network. COAI

highlighted that the attempt to link the local manufacturing to security consideration is

inappropriate, as security cannot be guaranteed simply by requiring equipment to be

manufactured in India. The concern on linkage of security to PMA has also been raised

by the Hon‟ble Prime Minister of India. COAI has made submission on the subject to

PMO also stating that the proposed PMA policy for electronics and specifically the

manner in which this is being applied for Telecom products be reviewed. PMA defined by

DoT is based on unrealistic manufacturing capabilities and has not taken into account

the existing and proposed manufacturing set up and its dependence on the yet to be

established eco-system. Moreover, no country in the world is 100% self-dependent, not

even China. India cannot work in isolation on security and has to follow international

standards.

White Paper

1. Parents, Children & Mobiles – The new love triangle: COAI released a public

awareness report named “Parents, Children & Mobiles – The new love triangle” in May,

2013 as an initiative towards educating the parents about the various parental controls

provided by numerous mobile phone companies. Increased usage of smartphones and

tablets by children these days has become a matter of worry for parents as they can

access any kind of content on the internet. The report highlights the possible challenges

and different applications available in the market to help the parents in solving them out.

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XI. COAI MEDIA DESK

COAI’s role and eminence as the thought leader of the industry was further enhanced this

year with COAI playing a vital role in the decision making processes related to several policy

and regulatory issues in the sector. The media presence of the association keeps building

up as the media looks forward to our views and expertise in industry issues and domain

knowledge to inform the citizens of the sector’s developments.

Amongst many issues, one of the key endeavors for COAI this year was a consistent liaison

and information sharing with media on the auction of 2G spectrum. COAI undertook studies

and analytics in association with leading industry analysts and experts and shared the

findings with the media proactively to help understand the implications of putting forth a

flawed pricing process. The consistent communications and media reports resulted in the

Hon’ble Supreme Court’s intervention in clarifying its order to auction the entire spectrum

freed from the licence cancellations via its order dated 02.02.2012.

COAI’s consistent prediction of a lackluster auction result owing to the unrealistic reserve

price and artificial scarcity of spectrum was also acknowledged by experts and realized with

the actual results of the auctions turning out likewise. This further strengthened COAI’s

position as a thought leader in the domain of telecom in the country.

Another major issue that came up was regarding concerns and misinformation on EMF

emissions from antennas on mobile towers. A number of media reports appeared with

alleged links between mobile towers and health effects on people. COAI undertook

measures to reach out to a number of media houses and conducted informative briefing

sessions and meetings to bring forth the truth, international reports and conclusions by

credible independent international agencies on the topic. COAI also explained the fact that

India’s emissions norms have been provided additional safeguard by lowering them to 1/10th

of the internationally practiced standards and presently have standards that are stricter than

most of the world.

Some of the media houses also started linking stories of alleged “illegal” towers in states and

regions with that of emissions from mobile towers and health effects on people. Such

campaigns led to various state governments and local authorities being pressurized, to

devise bylaws and state-specific guidelines owing to local feedback and activism. COAI

reached out to these media houses and provided information on the misinformation and

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myths associated with emissions from Mobile Towers. COAI also clarified that the alleged

“illegality” of towers was a matter of procedural drawbacks and the towers could not be

termed illegal per say. Information on the DoT guidelines on installation and operations of

Mobile Towers, which would be applicable across all states in the country were also shared

with the media. For one such instance in the national capital, a joint press conference was

organised in coordination with TAIPA to clarify the industry perspective on the matter.

Apart from these major issues, COAI continued to provide its views and expertise on several

matters related to the sector. From Unsolicited Commercial Communications (UCC) to IPv6

(Internet Protocol), and from Roaming to Preferential Market Access (PMA), COAI has been

leading from the front to provide the industry perspective and share important and relevant

information with the media.

We are also pleased to inform you that COAI went official on Digital Media this year via

Twitter and regularly shares industry updates, important white papers and relevant

information for the public through its twitter handle (@ConnectCOAI).

The industry continues to strive towards the enhancement and development of the industry

and continues to involve the citizens, the government, allied industries, and its major

stakeholders – and most importantly, the media – being a vital channel to convey our

objectives, aspirations and messages to the people.

Brief summary of the key media initiatives undertaken by COAI

during the year:

All of the matters presented below were widely covered in the print and visual media,

allowing for extensive presentation of COAI’s views.

Spectrum Issues – Pricing, Charges and Auction

Spectrum Usage Charges – As per media reports, the Department of

Telecommunications (DoT) in its proposal to the Union Cabinet, had recommended the

continuation of slab-wise spectrum usage charge regime, extending the discriminatory

policy regime against the GSM industry. COAI urged the Cabinet to take an informed

decision and ensure a level playing field by implementation of a uniform spectrum usage

charge between GSM and Dual Technology operators.

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Reserve Price of INR 14,000 crore for auction of 1800 MHz spectrum – The Cabinet

decided on a Reserve Price of INR 14,000 Crore for 5 MHz of 1800 MHz of spectrum,

pan India, to be auctioned. COAI expressed its disappointment at the spectrum pricing

decision stating that it affords no real relief to the problem of tariff and affordability,

industry health or national development. It further added that the proposed price does

not present a viable business case for the industry and will gravely impact its

sustainability and future expansion plans. COAI termed the Cabinet’s decision as against

consumer interest and having severe repercussions on the future viability of the industry.

Proposed Reframing of 900 MHz spectrum – COAI responded on the Telecom

Commission’s recommendation of 100% reframing of 900 MHz spectrum stating that it

would be against consumer, industry as well as the national interest and is discriminatory

for the GSM industry. COAI also referred to an independent study on the Spectrum

Reframing conducted by Analysys Mason which pointed out that operators with 900MHz

band would need to replace 286,590 base stations and install an additional 171,954

base stations to provide equivalent coverage on 1800MHz. Such a replacement of base

stations and deployment of additional sites would result in an incremental capex of INR

54,739 crores, and incremental annual opex of INR 11,762 crores. COAI also pointed out

that no proper consultation with the stakeholders was carried out by the TRAI on the

issues involved and the impact of Re-farming.

One-time fee on spectrum holding of incumbent GSM operators – In response to

the Cabinet decision for levying of one-time fee on spectrum holding of incumbent GSM

operators on a retrospective (beyond 6.2 MHz) & prospective (beyond 4.4 MHz) basis;

COAI stated that the decision was not only in violation of the license conditions but also

runs contrary to the affirmations given by the Government and accepted in both the

Houses of the Parliament - that all spectrum granted to the operators was as per the

applicable guidelines of the Government from time to time and is appropriately charged

through spectrum usage charges.

2G Auction Failure – Post the disappointing results of the 2G auctions, COAI pointed

out that the key reasons for the failure of the auction were the artificially high reserve

price that bore no congruence to market realities; and the fact that the majority of the

bidders were actually operators who lost their licenses and were compelled to participate

in the auctions despite the high prices and the limited availability, simply in order to

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sustain their customers, businesses and to protect their years of investments. Also, that

the artificial scarcity created by holding back spectrum, combined with the high reserve

price, dampened any enthusiasm for aggressive bidding by the operators.

Spectrum prices for 2nd round of auctions – Prior to the 2nd round of spectrum

auctions, COAI again urged the Government (DoT) to reconsider the unsustainable

prices of the spectrum offered. The Association submitted that at the proposed prices,

the only expected participation was what could be broadly termed “coercive

participation”, i.e. only operators having operations to save, may participate under

protest. COAI also urged the DoT to maintain a level playing field by reducing the

reserve price by 50% as done for the CDMA players and further extend the same to all

21 circles instead of only 4 circles as proposed. COAI added that attempts to arbitrarily

coerce participation in the auctions for assurance of any spectrum at extension, is

anathema to the very concept of auction and a “freely” determined market price.

Environment and Health Issues

Media outreach and sensitization on EMF emissions from Mobile Towers - A

number of meetings were held between the COAI team and editorial teams of

publications across India to sensitize them on the facts so as to give a better

understanding of the issue. This resulted in some positive and balanced stories from

publications on the matter and also prevented the incorrect and sensationalized reporting

that was being done by some of these publications.

Countering media stories on alleged “illegal towers” - A number of media reports

stating presence of alleged “illegal” mobile towers in certain cities and formulation of

local bylaws and guidelines by municipal authorities on installation and operations of

mobile towers had appeared recently. The stories wrongly linked this to EMF emissions

from the towers as a reason. COAI reached out to these publications and made them

aware of the DoT guidelines on installation of towers and EMF emission levels. A joint

press conference was also held in Delhi in association with TAIPA to address the

confusion regarding the alleged “illegality” of towers.

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Ghaziabad Media Interactions - It was shared by members that there were issues

concerning acquisition of new sites and sustenance of existing ones in the NCR,

especially in the Ghaziabad district. An interactive press briefing session was organised

and the media queries were satisfactorily addressed by the COAI spokesperson. There

was good media response and coverage on the activity.

ToI coverage on Odisha Government drafting local guidelines for mobile towers -

The Times of India reported from Bhubaneshwar stating that the Odisha government

was drafting local bylaws for mobile towers and has invited inputs from stakeholders on

the same. COAI contacted the ToI journalist and explained the industry perspective

elaborating on the fact that DoT guidelines are being developed and would be applicable

across the country. We also highlighted the fact that the SC had put a stay on a similar

action by the Rajasthan Government. The Times of India carried an excellent story on

these lines with the Principal Secretary of HUD ministry, Odisha Govt. quoting that they

will ensure there is no clash between the state bylaws and the DoT directives.

Column in Voice & Data Magazine - COAI has connected with Voice & Data Magazine

to come out with a dedicated monthly column from COAI. A dedicated authored article

from COAI on an industry issue of our choice will be published every month in the

magazine. The first article on misconceptions around EMF Emissions from Mobile

Towers has already been carried.

Technology & External Affairs

3GPP SA1 technical meeting held in India - The 3GPP Technical Specifications Group

Service and System Aspects Working Group 1 meeting was held in India for the first time

in New Delhi from 6-10 May, 2013; co-hosted by the Cellular Operators Association of

India (COAI) and the Indian Friends of 3GPP (IF3). Earlier in the year, a MoU was

signed between the COAI and IF3 to organise and provide support to all 3GPP meetings

and initiatives in the country. The meeting focused on topics primarily pertaining to LTE

Release 12 and concluded on a positive note with a promising outlook towards the next

release of LTE in India.

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Budget Recommendation and Impact on the Telecom Industry

Pre-Budget recommendations – COAI along with AUSPI submitted the telecom

industry’s pre-budget recommendations to the Finance Ministry, Government of India.

The key recommendations included the long awaited infrastructure status to be provided

to the sector; along with a revision of the high levies and taxes on the industry which

amount to more than 30% of the revenues. The precarious financial state of the industry

and the critical investment environment restricting its revival were also sought to be

addressed by the Government.

Union Budget 2013 disappointing for Telecom Sector – COAI stated its

disappointment on the announcement of the Union Budget 2013 as none of the critical

issues relating to the telecom sector were addressed. Detailed pre-budget

recommendations were made to Ministry of Finance by COAI and the need to provide

telecom with the status of infrastructure, lowering of multiples taxes and levies in the face

of the poor financial health of the sector, and the need to boost investor’s sentiment,

were some of the most pressing and important submissions. Although, the Finance

Minister emphasized the Government’s objective of inclusive and sustained growth as

well as financial inclusion, the sector which is vital for achieving the stated goals,

received only one of its recommendations – i.e. “infrastructure” status.

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XII. TELECOM CENTRES OF EXCELLENCE

“Empowering India towards Global Telecom Leadership”

Telecom Centres of Excellence, a Public Private Partnership (PPP)

initiative of Department of Telecommunications (DoT), Telecom Service

Providers and premier Academic Institutes were formed with the primary

objective to focus on capacity building to sustain telecom growth and to

help build an environment of innovation by creating synergies among

premier academic institutions & telecom companies. Formed in 2008, this PPP works under

the supervision of a 25 Member Governing Council headed by Secretary (T), Department of

Telecommunications (DoT) as its Chairman.

1. Achievements of TCOEs: The TCOEs have been effectively working on 70 Projects

over the last 5 years and have come out with 14 Patents including 2 US patents, 14

IPRs, 49 Research Papers aiding policy advocacy and 28 Commercialization Ready

Technologies. Beside these, 12 International Workshops/Conference Expo have been

conducted as a part of TCOEs mode of operations.

2. Standardization Activities:

(i) TCOEs along with 23 Indian Industries, 20 MNCs, 3 Industry Associations, 10

premier Academic Institutes and R&D organizations are actively working towards

telecom standardization activities.

(ii) 4 Standard Plenary Meetings of Technical Working Groups have been conducted till

June 2013.

(iii) A total of 8 Working Groups (WGs) are defined to cover Radio Access, Backhaul,

Core Network, Machine To Machine (M2M) communication, Devices, Green

Telecom, Services, Applications, Systems and Architectures (SASA) and Special

Interest Group (SIG).

(iv) Approximately 15 Work Items on commonly identified issues catering Indian

requirements are being addressed by these WGs.

3. Technologies launched from TCOEs:

(i) A compendium titled “Technologies Ready for Commercialization 2012” showcasing

brief description of 27 Products/Technologies (details available at www.tcoe.in) and

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which can be taken up by the Telecom Entrepreneurs/Manufacturers/Operators for

commercial exploitation was launched by the Hon’ble Minister of Communications &

IT during the Curtain Raiser Ceremony of India Telecom held in September 2012. It

also lists the IPRs, Patents earned by the TCOEs and Research Papers.

Booklet Launch Ceremony during the Curtain Raiser Ceremony of India Telecom- Sep 2012

(ii) A Simulator on Powering Cellular Base Station developed by Reliance IIT M Telecom

Centre of Excellence (RITCOE), IIT Madras won 6th Enertia Awards 2012 for

“Technology & Innovation in Renewable Energy”. The simulator will help Telecom

operators to optimize the energy consumption of the BTSs by using a judicious mix

of Mains, Generator & renewable energy sources. The stimulator provides

quantitative analysis of energy options: Solar PVs, Diesel Generator, Electrical Grid

and Batteries". The key aspect of the approach taken is that the potential back-up

solution is found through simulation given the set of input conditions.

(iii) BSNL IIT K Telecom Centre of Excellence (BITCOE), IIT Kanpur is offering

comprehensive consultancy services to organizations/enterprises wanting to migrate

to IPv6. The IPv6 consultancy services are backed by the formidable intellectual

capital of the institute and a cutting edge infrastructure, while also being highly cost–

effective.

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(iv) “Digital Mandi for the Indian Kisan” developed by BITCOE, IIT Kanpur has been

launched on 18th June 2013 in Odisha by Hon’ble Chief Minister of Odisha after

successful operation in Haryana.

Recognized by Ministry of Agriculture as technology of national importance, it is

aimed to disseminate the latest Mandi Prices to the Kisans through IVR, SMS and

Video. Currently 30,000 farmers are using this facility.

4. Establishment of 8th Telecom Centre of Excellence:

MoU Signing Ceremony in the presence of Shri Kapil Sibal, Hon’ble Minister of Communications

& Information Technology and Minister of Law & Justice on 5th

June 2013

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The 8th TCOE has been established at IIT Roorkee with 100% budgetary support from

RailTel India Corporation Ltd. The centre will be known as RailTel IITR Centre of Excellence

in Telecom (RICET) and its focus area will be “ICT & Broadband Applications”.

Telecom Sector Skill Council (TSSC)

Our Vision and Objectives:

TSSC is committed to developing world class skilled manpower for the Telecom industry.

TSSC, a not for profit organization in PPP mode, will be responsible for charting the human

resource requirement in the value chain of the telecom sector.

Our Promoters Our Governing Body Members

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Current Progress

Out of the 25 job roles identified (see below), National Occupational Standards (NOS) for 11

job roles have been developed and another 7 are to be completed by June, 2013.

Government Funding of Rs. 1.56 crores out of Rs. 11.6 crores have been received.

List of 25 Job Roles for Phase I of NOS Development

Partnership with Australia Industry Skills Council – IBSA & E-Oz

On 16th April, 2013 in the presence of the Australian High Commissioner to India Mr. Patrick Suckling and various other dignitaries, TSSC inked the MoUs with IBSA & E-oz.

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XIII. LEGAL UPDATES – JULY 2012 – JUNE 2013

Legal Updates – July 2012 – June 2013

1. COAI Petition on TTSL Spectrum: Supreme Court

COAI had filed a writ petition to challenge the Press Release dated 15.02.2012

issued by DoT in violation of the Judgment dated 02.02.2012 passed by Supreme

Court in Writ Petition (C) No. 423 of 2012. The petition prayed that DoT should be

directed to correct its records which wrongly refer to only 122 licenses as being

cancelled by the Judgment dated 02.02.2012. The petition further prayed that DoT

should be directed to take back 19 spectrum allocations in 1800 MHz band to TTSL

which stands quashed by the Judgment dated 02.02.2012 passed by this Hon’ble

Court.

i. On February 15, 2013, in IA 11 of 2012(Vodafone application on quantum of

spectrum to be auctioned), the Hon'ble Supreme Court said that once the

licenses granted to the private respondents on or after 10.1.2008 and subsequent

allocation of spectrum were quashed by this Court, the Government is duty

bound to auction the entire spectrum, which became available as a result of such

quashing. and it cannot avoid compliance of the Court's order in the guise of

acting on the recommendations made by TRAI. The Court also directed that the

entire spectrum released as a result of quashing of the licenses on 02.02.2012

should be auctioned without further delay.

ii. On March 11, 2013, the Supreme Court disposed of this petition stating that in

view of detailed orders contained in order dated 15.02.2013 passed by the court

in I.A.11 of 2012, no further order is required to be passed in this petition.

2. COAI Appeal on Wangiri Calls: TDSAT

COAI had filed an appeal challenging the TRAI direction dated 07.09.2012 on missed

calls (Wangiri calls) originating from outside the country. TRAI vide its said direction

had asked all the service providers to inter alia ensure that no ISD facility is activated

without the explicit consent of the subscriber (for both prepaid and postpaid

services).

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i. On September 18, 2012, the Tribunal granted interim stay of the impugned

direction and directed that compliance is to be made to Clause no. 4 i.e.

reproduced herein below.

iv. To inform through SMS, within ten days of the date of the issue of this

direction, all pre-paid cellular mobile telephone service consumers not to respond

to missed calls from unknown international numbers with prefix other than “+91”

or calls about winning prizes or lottery and send such SMS to the consumers

every six months.

ii. The Tribunal also ordered that the direction to provide easy and transparent opt-

out facility to the consumers of the cellular mobile telephone service for activation

or deactivation of ISD facility is also to be followed.

iii. On November 2, 2012, the appeal was allowed as per the judgment of the

Hon'ble Chairman. However, the Hon'ble Member pronounced a dissenting

judgment. Since these two dissenting judgments resulted in a deadlock, the

interim order pronounced unanimously by the Chairperson and Member will

continue to be operative till the matter is adjudicated by TDSAT.

3. North East/ Assam Subscriber Verification Petitions : TDSAT

The judgment in this matter was pronounced on November 1, 2012 whereby petition

was allowed in so far as the penalties imposed upon the Petitioners on the ground

that re-verification of the CAFs had been carried out by them relying on or on the

basis of the Gram Panchayat Certificates, Caste Certificate & Voter ID Cards.

i. It was observed that though re-verification as per procedure of 30.09.09 till

31.03.11 had been accepted in the body of the judgment but the final conclusion

did not record the same.

ii. The judgment also did not record any direction for refund.

Therefore on the same day, COAI moved an application seeking inclusion of

above two aspects wherein the prayer seeking mentioning of acquired customers

in the concluding paragraph was allowed.

iii. On November 2, 2012, the Tribunal heard the application and ordered that

the penalty issued on account of certificates issued by the Gram Panchayat,

caste certificates as also the voter ID cards issued by the Election Commission of

India is not only with regard to the verification of the CAFs but also for acquisition

thereof.

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iv. The Tribunal further directed that the parties may file their respective statement

stating the refundable amount by each of the operators. The matter is coming up

next on July 1, 2013 for reconciliation of amount.

4. BSNL and MTNL Appeal on Port : TDSAT

BSNL and MTNL filed appeals against TRAI Regulation on Port Charges dated

18.09.2012 which had reduced port charges. Even though BSNL had not made any

operator a party, COAI impleaded itself in the matter.

i. On October 31, 2012, the Tribunal declined BSNL and MTNL’s interim prayer to

stay TRAI Regulation on Port Charges dated 18.09.2012.The Tribunal also

directed that no coercive steps shall be taken against BSNL and MTNL if they do

not refund the amount received by way of advance port fees for the year 2012-

2013.

ii. BSNL filed a petition against TDSAT’s interim order in the Delhi High Court. On

November 29, 2012, the High Court disposed of the petition while directing that

pending disposal of the appeal before the TDSAT, in respect of each additional

port, the service providers, will furnish a bank guarantee of a nationalized bank

qua the difference between the rates per port, arising on account of applicability

of the 2012 regulations as against 2007 regulations.

The matter is coming up next on July 5, 2013.

5. COAI Writ and LPA on Port Charges: Delhi High Court

COAI filed a writ petition challenging the BSNL Circular dated 08.02.2013 and

invoices of BSNL, whereby BSNL had illegally and wrongly sought Bank Guarantees

for renewal of existing ports also (i.e. ports existing upto 30.09.2012) as it was in

violation of the interim order dated 31.10.2012 passed by TDSAT in Appeal No. 20 of

2012 and the order dated 29.11.2012 of the Hon'ble Delhi High Court in Writ Petition

(Civil) No. 7218 of 2012.

i. On March 18, 2013, the Hon’ble Court directed the service providers to file

undertaking/affidavits wherein the Chairman and Managing Director has to

undertake that till the next date of hearing, the assets of the Company shall not be

alienated except in the ordinary course of business. The undertaking shall also

indicate that the Appellants will make good the differential amount in the event

their challenge to the impugned circulars fail.

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ii. COAI filed an LPA against the Single Bench order dated 18.03.2013 praying inter

alia that the impugned conditions incorporated in the order dated 18.03.2013

requiring service providers to file undertaking/affidavits wherein the Chairman and

Managing Director has to undertake that till the next date of hearing the assets of

the Company shall not be alienated except in the ordinary course of business and

also disclosing the book value of their assets should be set aside.

iii. On May 31, 2013, this LPA was disposed of wherein the Hon’ble High Court

modified the order dated March 18, 2013 and directed that the undertaking is to be

signed by the Chief Executive Officer and has to state that the differential amount

will be paid with an appropriate rate of interest in case the Appellants lose the

matter.

The writ is coming up next on August 8, 2013.

6. Israni PIL on EMF : Rajasthan High Court

A petition was filed in the Jaipur High Court seeking inter alia, removal of towers from

schools and hospitals and residential areas and setting up a regulatory body to

monitor radiations emitted by towers.

COAI Writ against Rajasthan State Policy: Rajasthan High Court

COAI filed a writ petition challenging the impugned Circular dated 04.07.2012 issued

by the Deputy Director (Secondary), Secondary Education, Rajasthan, Bikaner and

the purported Model Bye-Laws issued by the State Government of Rajasthan in

relation to mobile towers/pole antennas and circulated to the Municipal Corporations

etc. vide communication dated 31.08.2012.

This matter was tagged with Israni PIL and disposed of vide Order and Judgment

dated 27.11.2012 wherein the Court has directed inter alia:

Removal of towers from hospitals within a period of two months from today.

Removal of towers from colleges within a period of two months from today.

Removal of towers from within 500 meters of jail premises within a period of six

months as fixed by State Bye laws dated 31 August 2012.

Consideration of removal of towers existing near ancient monuments or old

heritage buildings after examining facts on an individual basis, within a period of

two months from today.

Looking into towers on playgrounds and taking appropriate actions within a

period of two months from today.

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Bye Laws framed by Rajasthan Govt. for installation of Towers to be upheld.

State Government and Local authorities to have discretion to order the removal of

towers on the basis of individual grievances received.

COAI SLP against Rajasthan High Court judgment: Supreme Court

i. On Jan 21, 2013, in the SLPs filed by COAI against the recent Rajasthan

High Court judgment dated 27.11.2012, Solicitor General appeared for DoT

and informed the Court that the Central Government while considering the

recommendation of the Inter-Ministerial Committee have implemented new

EMF norms whereby from 01.09.2012, the exposure norm has been reduced

to 1/10th of that prescribed by ICNIRP. He stated that there are strict penalties

for non - compliance of the same.

ii. The directions issued by the Rajasthan High Court were extended for 3

weeks by the Supreme Court.

iii. On April 3, 2013 Hon’ble Supreme Court adjourned the matter and the

compliance to directions issued by the Rajasthan High Court was also

extended till the next date i.e. July 11, 2013.

COAI Annual Report

Documents

india mobile subscriber

wireless subscriber

india total cellular

global revenue

indian telecom revenue

india lags

indian mobile subscriber

broad global telecom