“We are surprised at the need to review a six-year-old recommendation from the agency, especially if all conditions precedent and justifications remain equally valid and relevant to the recommendation,” Reliance Jio said in his answer on the supplementary consultation paper of the Indian telecommunications regulator on improving broadband access. “Rethinking this topic at this stage with a completely new perspective, assessing the possibility of misappropriation by access service providers and examining the possibility of passing on the services via a Direct Benefit Scheme (DBT) can have no other effect than a delay have. ”the implementation of urgently needed incentives to revitalize the FLB [fixed line broadband] Sector.”

The complementary advice was announced May, after the telecommunications ministry expressed concerns that an exemption of fixed line broadband providers as an incentive for broadband expansion would result in “abuse by licensees”, hence the proposal to grant customers subsidies for broadband connections, as with liquefied gas. “TOverall, his paper raises new and important policy questions in the areas of the extension of financial incentives to TSPs, its appropriateness and robustness of surveillance, and Research into the possibilities of using DBT in the diffusion of FLB. As most of these topics are the first to come up for consultation, this Consultation Paper (CP) should not be treated as a supplementary CP but as a pre-CP in order to cover the topic comprehensively“Jio said in his reply (emphasis mine).

“No incentives for fixed line broadband”

  • Uneconomical business model also in cities: “In the absence of effective incentives to move FLB networks, FLB networks have not supported broadband penetration in the country. As a result, the FLB market in our country remains severely underdeveloped due to an unaffordable cost structure that leads to an inefficient business model even in the urban / semi-urban areas, ”Jio said in his response.
  • The incentives should go directly to the service providers: “We cannot find any justification for this proposed change in approach and strongly believe that the costs, infrastructure requirements and gestation period of the FLB sector justify direct and indirect incentives only for the service provider,” said Jio, “as this alone contributes to it will create an environment for investments in the fixed network infrastructure by returning funds for the expansion and modernization of the fixed network. This was also recognized under the National Digital Communication Policy (NDCP-2018), which clearly stated the “Review of the rationalization of license fees on fixed line revenues as an incentive for digital communication” as one of the strategies for “catalyzing investments for the digital communication sector “Provided. ”
  • Fixed line broadband and mobility are different: Responding to TRAI’s concerns that exemption from license fees for fixed line broadband providers would lead to a level playing field, Jio said, “Fixed line service does not provide mobility to the end user and is therefore not a substitutable service. In addition, the fixed line services do not use spectrum, which is a scarce natural resource, but actually help to maintain the same. “
  • OTTs should have been regulated earlier: “When it was most appropriate and urgently needed, the agency did not impose the ‘same services, same rules’ principle in the case of OTT communications services, which replace the bearer services for voice and messaging and can be used at a fraction of the cost “Argued Jio (read about this argument here). In that consultation, however, Jio made this point for only one narrow reason: He argued that “same service, same rules” should not be used as a pretext to deny telecommunications companies royalty exemption.

“Embezzlement not likely”

  • Jio argued that money misappropriation was unlikelybecause “the nature of FLB and wireless broadband are significantly different due to the area of ​​coverage of the two. Therefore, misappropriation concerns do not apply. ”The company added that“ The separation of revenue between wireline and wireless services is already permitted under the license, assessed by CCAs / DoT and government / CAG for the purpose of frequency usage fee collection is checked “.
  • FLB DBT not realistic: “The pricing and the input costs are completely different with LPG [cylinder subsidies] and telecom. The direct transfer of services to LPG has a controlled pricing mechanism and all PSU service providers offer the service at the same subsidized tariff and it is easy to set a DBT tariff. This is not possible with FLB as the costs will vary widely due to different technologies or cables such as OFC or copper cables or right of way costs which vary locally and can also be based on the type of road surface / excavation technology, the size of the business etc. leading to different tariffs offered by different service providers as part of a fee reduction scheme, which requires a different DBT that would not be acceptable to all anyway, ”argued Jio.

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