No extra spectrum needed to maintain network stability, quality: COAI

Telecom operators believe that there is no requirement of additional spectrum to maintain stability and quality of networks amid the 21-day nationwide lockdown imposed to combat the spread of coronavirus, industry body COAI said on Wednesday.

Recent series of measures, including streaming services switching content to SD and traffic redistribution has led to reduced pressure on networks, the Cellular Operators' Association of India (COAI) said.

"Over the past few days, the industry, in concern with actions coordinated with the Department of Telecom (DoT), has seen a flattening of traffic demand on member's networks.

"Some of these actions relate to streaming services reducing their content from HD to SD, local municipalities working with operators to bring sealed towers back online, some redistribution of traffic on the network, among other things," COAI Director General, Rajan S Mathews said in a statement.

As a result, operators believe there is no present need to request for any additional spectrum, he said.

"Based on the present condition of member networks, we believe there is no such present need and operators remain confident the steps they have taken presently can maintain the reliability and quality of their networks and services," Mathews said.

Prime Minister Narendra Modi on March 24 had announced a complete lockdown of the entire country for 21 days in an unprecedented move to contain the spread of coronavirus, shortly after which the Centre said road, rail and air services will remain suspended during this period.

So far, the pandemic has claimed 38 lives in the country and the number of COVID-19 cases has increased to 1,637 in India.

Coronavirus impact: As data usage jumps, telcos ask govt for more spectrum

Telecom operators have demanded additional spectrum urgently on a temporary basis in order to cope with the unprecedented spurt in data usage as a result of “work from home” and “self-quarantine” at homes across the country due to the coronavirus (Covid-19) outbreak.

In a letter to the department of telecommunications (DoT), the Cellular Operators Association of India (COAI) has demanded additional spectrum both for “access and backhaul microwave” for a short term and temporarily as they need to augment their capacity to meet the growing demand. COAI director general Rajan Matthew however says they are still waiting for a response from the government.

The telecom association has also asked DoT for expedited permission for tower enhancement from states (as thy ramp up capacity), extension in minimum roll out timelines by six months and permission for go for digital acquisition of new customers instead of physical documentation, especially as there has been a sharp rise in acquisition of new customers. This will reduce the time to on-board new subscribers.

According to BofA Global Research India’s fixed broadband penetration is only 6 per cent so the bulk of the pressure of the work for home traffic (which is around 70 per cent of the total traffic) is expected to be on the cellular network. India has only 19 million fixed broadband users compared to 630 million (3g and 4G) users. Analysts say that many operators like Airtel are not charging for installation or security for new customers of fixed broadband, while ACT has upgraded speed to 300 Mbps at no extra cost and even BSNL is offering free of charge broadband for one month for those who have a landline of their company already.

However, the demand from COAI is valid considering the fact that the Federal Communications Commission in the US has granted AT&T, Verizon, T-Mobile and US Cellular temporary access to more spectrum so that they can increase their wireless capacity for around 60 days. The DoT which is planning to go for a mega spectrum auction has no shortage of airwaves in various bands from 700, 1800, apart from the available 5G spectrum which it could release in times of crises.

Mobile networks have been working at 60 per cent to 65 per cent capacity but thanks to coronavirus have seen their traffic go up by 10 per cent but that seems to be moving further up. While COAI says that it still has capacity available, a long lockdown of cities as well as offices could lead to more pressure on the network and might require more temporary capacity.

COAI has already received positive response from OTT platforms who consume about 30 per cent of their network capacity to use lesser bandwidth. Companies like Hotstar (with 300 million customers), Zee5, and Viacom 18 controlled Voot have already committed that they will use lesser capacity and if need arises shift customers from high definition to standard definition services to achieve that.

Three telcos to seek urgent SC hearing as deadline to pay dues nears

Three telecom operators will appeal before the Supreme Court on Monday to allow them and the department of telecommunications work out a timeframe for paying dues they owe the government for spectrum.

Bharti Airtel, Vodafone Idea Ltd and the Tata group will request the court to hear their petition urgently by Tuesday as the deadline for them to pay Rs 147,000 crore as Adjusted Gross Revenue (AGR) ends on January 24.

The court, on October 24 last year, had ordered telecom companies to pay their licence fee and spectrum user charges (SUC) dues within 90 days. Failure to pay the dues could lead to contempt of the court.

Sources said Sunil Mittal, chairman of Bharti Airtel, and Kumar Mangalam Birla, chairman of Vodafone Idea, are believed to have met the telecom secretary on Saturday to discuss the dues.

Telecom companies holding discussions on a possible staggered payment plan--if they get the Supreme Court’s permission. The Cellular Operators Association of India (COAI), the apex association of the industry, has suggested a 10-year staggered payment scheme with a two-year moratorium, but that is based on the assumption that companies will pay the dues without interest or penalty.

Companies argue that the government has earned about Rs 17,500 crore from license fee and spectrum user charges. “We are no longer questioning the amount that we have to pay. The important question is how do we pay it in a staggered way especially as most of the companies are public limited with shareholders and ensure it is a viable business,” said Rajan Matthew, director general of COAI.

Matthew said the government has leeway as the union budget had not considered this large amount while fixing the revenues from AGR and SUC.

He points out that companies are in discussions to look for a model by which they do not have to take huge additional burden on their books every year. “Our plea will be for a reduction in license fee and SUC which totally comes to 13 per cent of AGR. We will appeal to the government that they could reduce this amount in such a way that it could neutralize the additional burden due to the AGR dues”.

The three companies appealing before the top court have to fork out a total of Rs 105, 228 crore based on calculations made by the telecom department on their total dues. Vodafone Idea has to pay the most: Rs 53,000 crore.

The Tata group has left the telecom business.

Telcos ready to bite the bullet: Airtel, Voda Idea to hike tariffs from Dec

Incumbent telecom operators Vodafone Idea and Bharti Airtel have announced tariff hikes starting December 1. This news comes at a time when the telecom sector has reported its worst quarterly performance ever.

The telcos, however, did not provide any guidance on how the hikes will be rolled out and which segments of the subscriber base will be impacted.

“To ensure its customers continue to enjoy world-class digital experiences, Vodafone Idea will suitably increase the prices of its tariffs effective December 1, 2019,” said the statement. It added that Vodafone Idea will continue to actively invest in making its network future-fit by embedding new-age technologies and launching new products/services to cater to the evolving needs of its over 300 million customers.

“The telecom sector is highly capital intensive with fast-changing technology cycles that require continuing investments. It is, therefore, extremely important that the industry remains viable to support the vision of Digital India,” said Bharti Airtel in a statement.

Mobile data charges in India are by far the cheapest in the world, even as mobile data demand has grown. From October 10 onwards, Reliance Jio started charging customers 6 paise a minute for making calls to any non-Jio mobile number.

This initiative came at a time when Jio already commands a bulk of the market share. The additional charge was introduced soon after the Telecom Regulatory Authority of India moved to reopen the deadline for ending charges for terminating calls on rival networks beyond January 2020. Analysts did not see this charge as a positive move for Jio’s subscriber sentiment. Vodafone Idea itself generated earnings before interest, taxes, depreciation, and amortisation of ~300 crore from net interconnection usage charge in the second quarter (Q2).

Vodafone Idea’s subscriber base slipped by another 9 million, at a reduced churn rate, during Q2 to 311.1 million (Q2 of 2018-19: 422 million). Average revenue per user (ARPU) was at ~107, compared to ~108 in the first quarter (Q1). Although the company reported better retention of 4G customers, it has fallen behind rivals Jio and Airtel in expanding 4G base. The operator has lost almost 110 million subscribers since October 2018, when it introduced minimum recharge plans to weed out low ARPU subscribers.

“Muted 4G subscriber additions remain a key concern for Vodafone Idea. Without any meaningful government support, Vodafone Idea’s survival appears to be at risk, which may result in the Indian telecom market moving to a duopoly (private operators), and opens up possibilities for Airtel subscriber additions to improve and even tariffs,” noted Rajiv Sharma, co-head of research, SBICAP Securities.

During Q2, Vodafone Idea added 5.5 million 4G customers (Q1 of 2019-20, it was 4.1 million), taking the overall 4G subscriber base to 90.3 million with increasing 4G net adds. Even data usage volumes, while improving, are still behind Airtel and Jio.

The acute financial stress in the telecom sector has been acknowledged by all stakeholders and a high level Committee of Secretaries headed by the Cabinet secretary is looking into providing appropriate relief. The company reported total liability of ~25,678 crore for adjusted gross revenue towards Department of Telecommunications, following a Supreme Court ruling.

Jio, Vodafone Idea, Airtel pay govt over Rs 4500 crore in spectrum dues

Private telecom operators Reliance Jio, Vodafone Idea and Bharti Airtel have paid the Telecom Department over Rs 4,500 crore in spectrum dues in the last three to four days, according to sources.

Sources said that the payments came in before the due date.

The sparring telcos — some of which are reeling under acute financial stress and are seeking immediate relief measures — have made the payment towards deferred spectrum liability (or instalment payment for radiowaves bought in past auctions) which fell due on October 21.

While Mukesh Ambani-led Reliance Jio has paid Rs 1,133 crore to the Department of Telecom, Vodafone Idea has made Rs 2,421 crore payment towards spectrum dues. Sunil Mittal's Bharti Airtel has paid Rs 977 crore. Taken together, these three players have paid over Rs 4,531 crore towards spectrum dues late last week.

Emails sent to Reliance Jio and Airtel went unanswered, while a Vodafone Idea spokesperson said that the company does not comment on matters that are business as usual.

The government, in March last year, enhanced the number of annual instalments for spectrum payment from 10 to 16 years to provide a breather to the debt-laden telecom sector.

But with the industry reeling under financial stress, Vodafone Group Chairman Gerard Kleisterlee and CEO Nick Read recently met Telecom Secretary Anshu Prakash, as the company sought a two-year moratorium on deferred spectrum payments, and other relief measures from the government.

The British telecom giant has asserted that it is focused on the successful integration of business between Vodafone and Idea.

The telecom sector has been battered by falling tariffs, eroding profitability and mounting debt in the face of stiff competition triggered by disruptive offerings of Reliance Jio. The industry has been seeking urgent relief such as cut in levies like licence fee and spectrum charges, and release of GST input tax credit locked up with the government.

In a sector stung by policy and regulatory issues, battlelines have been drawn more recently over the contentious matter of call connect charges, where the regulator is reviewing whether or not the zero termination charge regime should be pushed back from the originally-stated timeline of January 1, 2020.

Reliance Jio has alleged that any review of call connect charges by Telecom Regulatory Authority of India (TRAI) "sabotages" the Prime Minister's vision for Digital India, and will hit not only the regulator's credibility but also investor confidence as the move protects vested interests of some old operators. Bharti Airtel has favoured continuation of call connect charges till 2022.

Vodafone Idea and state-owned BSNL too have favoured levying of the interconnect usage charge (IUC), currently 6 paise per minute, on every incoming calls from the network of other operators.

Voda Idea, Airtel lose 41.75 lakh users in June; Jio and BSNL gain: Trai

Telecom operators Bharti Airtel and Vodafone Idea continued to lose subscribers - 41.75 lakh combined - during June, while rival Reliance Jio added over 82.6 lakh users, according to data released by Trai.

In absolute terms, Vodafone Idea continued to lead the total subscriber tally at 38.34 crore, followed by Jio with 33.12 crore and Bharti Airtel with 32.03 crore.

Vodafone Idea shed 41.45 lakh subscribers, and Bharti Airtel 29,883 customers during June, while the Jio continued to add customers at a breakneck speed.

Telecom Regulatory Authority of India (TRAI) data showed that Jio gained 82.68 lakh customers in June, higher than 81.80 lakh additions it had notched in May.

State-owned Bharat Sanchar Nigam Ltd - despite all its financial and operational woes - continued to gain subscribers in June as well. BSNL, which was the only mobile operator apart from Jio to add customers, gained 2.66 lakh users during June.

Vodafone Idea and Bharti Airtel, which have introduced minimum recharge schemes in their quest to chase higher average revenues per user (ARPUs) and improve financials, have seen their subscriber base erode in the past months but the pace of subscriber loss appears to have slowed down in June.

For instance, Vodafone Idea had lost 56.97 lakh subscribers and Bharti Airtel 15.08 lakh users in May. These two operators have been locked in a bruising tariff war following the entry of Reliance Jio, backed by India's richest man Mukesh Ambani.

Jio's entry into the market dented the financial metrics of the operators, deepening the impact of regulatory decisions like cut in termination charges, even though the voice and data usage per se have been growing at a scorching pace.

Jio shook the mobile telephony market with free voice calls and dirt cheap data in 2016, and within three years became the largest telecom player in the market by revenue.

It is now hoping to repeat the feat in fixed line broadband space and has recently announced that 'Jio Fiber' will offer free voice calls for life from landlines, 100 mbps minimum broadband speed at subscription starting from Rs 700 a month and free HD TV set on a commitment to an annual plan.

As on June 30, 2019, Vodafone Idea had a subscriber market share of 32.9 per cent, Reliance Jio (28.42 per cent), and Bharti Airtel (27.49 per cent).