Transcript Document

Presentation to the Media
“Delivering the promise of improved
Access, Coverage and Teledensity in
India”
AUSPI
16th November 2005
1
Agenda
1.
About AUSPI
2.
Promoting advanced Telecom technologies - CDMA
3.
Fueling unprecedented domestic investment and improving
teledensity
4.
Value for customers
5.
Enunciating a telecom vision for India
6.
Enablers for achieving teledensity improvement, and AUSPI’s
future plans
2
About AUSPI
1.
Established in 1997
2.
Members
1.
HFCL
1.
Reliance
1.
Tata
3
Objectives of AUSPI
National /
International Players
Policy Maker
Regulator
AUSPI facilitates the adoption of advanced
telecom technologies, to accelerate India’s
transition into a knowledge economy
Vendor
International
organizations
like IEEE, CDG
4
New Leadership
Mr. Ratan N Tata
Mr. Anil Ambani
5
Why CDMA ?
•
Better voice clarity & consistent quality
•
Enhanced privacy
•
Superior power control
• Lowest radiation level
• Increased talk time for mobile phones
•
High Speed Data
• High speed Internet access
• India has less than 0.4% PC penetration (residential)
• CDMA 1x handsets with 140 kbps speed offers a superior
alternative for e-mail and Internet access
• Advanced platform for building highly innovative applications
•
Most successful 3G technology
• CDMA2000 controls 85% of the World’s 3G market and adds 15
million new users per quarter Worldwide
• Even the GSM 3G evolution relies on Intellectual property created by
CDMA!
6
3G technology – a large opportunity for India
Enabling affordable fixed and mobile broadband access for urban and rural areas
7
CDMA Today
•
Operational in the country with 43 private networks
•
Has more than 21 million subscribers in the country
•
Created new markets for mobile services
•
Over 1 Mn PCOs operational
•
More than 285 Mn subscribers, 130 operators and 210
networks Worldwide
•
India is emerging as the key driver of growth for CDMA
•
CDMA created a competitive landscape that made wireless
affordable
8
Rapid wireless subscribers ramp-up
Source: TRAI
Over 61 Mn net wireless subscribers added since competition from CDMA was introduced
9
Affordable wireless services
Source: CDG, AUSPI, TelecomWatch,COAI, TRAI
10
Healthy competition in Handset market
Large number of Handset OEMs with lack of dominant market share
helps create a competitive market place
Note: Vendors with a market share under 5% have been placed in the “other” category
Source: Gartner
11
Investments, subscribers and coverage by
AUSPI members
September 2005
By 2007 (Est.)
Investments
Rs. 36,100 Cr
Rs. 53,000 Cr
Subscribers
20 Mn
(Oct. 05)
75 Mn
Number of
Towns/Cities covered
3,500
(Oct. 05)
5,700
(by 2006)
Number of Villages
covered
1 lakh
(Oct. 05)
4 lakh
(by 2006)
12
Delivering enhanced value for customers
• Affordable service
• Subsidized handsets
• Innovative products
• Innovative applications
13
Vision
•
AUSPI share Prime Minister Manmohan Singh’s vision of rural advancement and urban
renewal
“Science &Technology system can play a decisive role only when it advances the
well being of all sections of society, not just a privileged few. It must play the
bigger role of creating wealth for all, not just a selected few. A theme that is close
to my heart is on ‘making technologies work for the poor and the
underprivileged’. In other words, can we develop technologies, which will
ameliorate the poverty, create jobs, remove the disease burden of the poor, and
improve the overall quality of life?” (Source : Speech at CSIR)
•
Indian IT and Telecom can jointly transform India into a knowledge society
•
AUSPI will help define roadmap to achieve a dramatic increase in teledensity by end
2007
14
Teledensity closely correlated with GDP growth
Source: TMG, ITU
•
10 % increase in teledensity corresponds to 0.2% to 0.6% increase in GDP (Source: Vodafone)
•
In a country like India, a rapid increase in telecom infrastructure has multiple benefits-a US $1 investment
in telecom leads to US$ 6 increase in GDP (Source: World Bank)
•
Offering differentiated services (voice, Internet access, Multimedia etc.) via advanced wireless networks
will boost India’s economic growth
15
Enablers for achieving increased teledensity
•
AUSPI already instrumental in establishing the early building blocks : NTP 99,
migration to revenue share license fee regime, and transition to Unified Access
Service Licensing Regime
•
AUSPI’s future focus includes the following key enablers for enhanced teledensity:
• Early resolution of spectrum issues
• Allowing technology innovation to flourish – case of FWPs, Broadband
• Enhancement of rural teledensity, including the use of USO funds
• Sharing of National resources
• Expeditious interconnection
• Removal of ADC
• Redefinition of Adjusted Gross Revenue (AGR)
• Reduction in Revenue Sharing from 10% to 6% including USO levy
• Identification and sharing of global best practices
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Early resolution of spectrum issues
•
Technology neutral judicious allocation of spectrum to all service
providers. Equality principle for all technologies.
•
Sufficient upfront allocation to allow efficient planning, based on
international average of 15 + 15 MHz
•
Additional allocation of adequate and appropriate spectrum to CDMA
operators
•
Additional spectrum should be allotted in 1900 MHz band to CDMA
operators as both Infrastructure and 800/1900 MHz dual band handsets
are commercially available (unlike 2100 MHz band)
•
Spectrum usage charges to be reduced to cover only cost of
administration and management of spectrum
•
CDMA operators should be migrated to a system of charging for
Microwave access and backbone frequency comparable to GSM
17
Allowing technology innovation to flourish –
case of FWPs
•
Developing nations around the world have used FWPs quite effectively to circumvent problems
associated with the creation of last mile copper networks
•
In India, fixed wireless services have contributed greatly to the growth of fixed services, & were
specifically authorised in the basic telecom licenses issued in 1997
–% growth of copper fixed line connections for 12 months ending Jun 30, 2005 – 0.2%
–% growth of FWP connections for 12 months ending Jun 30, 2005 - 138%
(Source: TRAI)
• FWPs serve as highly functional family phones, with affordable fixed service tariffs
• There is a huge difference between “mobility” & “portability”. Reclassification of FWPs as mobile phones
will result in great loss for subscribers, besides creating an unhealthy monopoly of the incumbent
• FWP services must continue to be classified as fixed services
• FWP services have been classified as fixed services since inception
• BSNL’s demands for IUC/ADC on FWPs will result in its unjust enrichment, beyond TRAI’s earlier
quantification of ADC eligibility
• ADC relates to provision of below cost services, not the portability/mobility of a device. ADC, like
other tariff related matters, should be decided by TRAI
• FWP attract a much higher import duty compared to mobile phones, based on their different
classification
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Allowing technology innovation to flourish Broadband
•
For knowledge based society like ours, broadband penetration would
be of top priority.
•
Broadband would create jobs, increase productivity through
infrastructure built up.
•
Provide access to new and improved service to the population.
•
Availability of broadband service at affordable price will have positive
impact on GDP. To increase broadband penetration AUSPI suggests:
 Reduction in Custom Duty to the extent of 5% with no CVD for broadband
equipment.
 100% depreciation in CPEs like PCs in the first year.
 Government subsidy in rural and semi urban area.
 Encouragement of e-governance by government.
 Adequate spectrum in one lot for wireless broadband through CDMA
 Streamline allocation of spectrum and the role of SACFA.
19
Enhancement of Rural density
35
31.1
30
26.2
25
21.3
20
15
10
5
0
6.9
2.3
0.5
1999
8.2
2.9
10.4
3.6
5.1
4.3
0.7
0.9
1.2
2000
2001
2002
Rural
• To
14.3
12.2
1.5
2003
Total
9.08
9.86
1.7
1.74
1.94
2004
2005
Jul-05
7.04
Urban
Source: TRAI
bridge the Urban-Rural divide, Cost to Serve should be reduced
• Innovative
mechanisms need to be introduced, including effective
utilization of the USO Fund
20
Sharing of National resources
•
Infrastructure sharing is prevalent in countries like Malaysia,
Hong Kong, Singapore, Australia. This is driven by a “Code of
Access to Telecom Infrastructure”
•
Infrastructure sharing reduces duplication & waste of national
resources
•
Infrastructure sharing can be on reasonable commercial terms
•
Standard policies are required from the Central and State
Governments to facilitate development of telecom infrastructure –
e.g. cell site installation, Right of Way (ROW) permission
21
Expeditious Interconnection
•
Interconnection is to be treated as a right and
must be granted without delay
•
Interconnection terms should be reciprocal
•
There must be flexibility in call handover
principles to facilitate “least cost” in end-customer
tariffs
•
All subscribers of all networks should be allowed
to access the services of any service provider
22
Removal of ADC
• ADC regime is not only non-transparent but difficult to monitor and
administer.
• USO Fund, (whereby all operators contribute 5% of their revenues),
is in existence for providing services in rural areas; imposition of an
additional burden in the form of ADC on operators is not justifiable
• ADC has been withdrawn in most of the countries as it has been
found to be inefficient, anti competitive and lacking in transparency
23
Redefinition of Adjusted Gross Revenue
(AGR)
•
Presently AGR definition has serious flaws, also accepted by
TRAI
•
Following to be removed from AGR definition:
•
Interest & dividend income from investments
•
Revenues from sale of handsets, CPE and Capital
Goods
•
All payments to other licensed operators, ISP income
(since no license fee is payable by ISPs)
•
Reversal of debits and excess provisions
•
Sale of assets
24
Reduction in levies
• India has one of the highest tax regimens in the World, and levies must be
reduced to bring them in line with International best practices
Pakistan
Sri Lanka
China
India
Regulatory charges
% age of revenue
%age
% age of revenue
% age of
revenue
Service tax, GST
GST
VAT
3%
10% + GST
License Fee
0.5% + 0.5% R &
D
0.3% turnover (t.o.) +
1% of capital invested
(inv)
Nil
5 – 10%
Spectrum Charge
Cost recovery
~1.1% to t..o
~0.5%* (China
Mobile)
2 ~ 6%**
USO
1.5%
Nil (only on ISD calls)
Nil
Incl in license
fees
Total Regulatory
charges
2.5% +GST+ cost
recovery
1.3% t.o.+1% inv+VAT
0.5%+3% (Tax)
17%~26% + GST
* Backbone spectrum charges extra **Est. from Spectrum fees & revenue of China Mobile (Source: TRAI)
• High percentage of revenue share to be brought down to 6% including levy for USO
fund
• High service tax of 10.2% to be brought down (already 1/3 of the total collection of
service tax is estimated to be from telecom services)
• With growth of 3 to 4 million subscribers per month the additional revenues will in any
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event compensate for reduced taxes and levies
Identification & sharing of Global best practices
•
Establishment of handset testing procedures
•
International roaming settlements
•
Benchmarking service delivery
•
Facilitating establishment of common standards
•
Facilitating interactions between operators through joint workshops and
experience sharing
26
In conclusion
•
AUSPI committed to play its role in the fulfillment of Government’s vision for
enhanced telecom connectivity in India
•
AUSPI members have contributed a sizable proportion of the growth seen in
the Indian market
•
AUSPI will continue to embrace the latest technologies with a view to
speeding up the transition of the Indian economy into a knowledge-based
information society
27
Thank you !
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