A big win for India

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2016-02-09 15:21

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TRAI says no to Facebook's "Free Basics"
Trai has barred differential pricing on data services—something all the major telcos and even Mark Zuckerberg-run Facebook have been pushing for—with immediate effect.The telecom regulator is in a tearing hurry.
Monday’s differential pricing regulation is the third instance in 2016 when the Telecom Regulatory Authority of India (Trai) has shown that there’s no time to be wasted this year.The news came as a disappointment to the telcos obviously, and was welcomed by activists, with many industry watchers saying Facebook brought it upon itself.
“The telecom industry is disappointed with Trai’s decision to rule out differential pricing,” Rajan Mathews, director general, Cellular Operators’ Association of India (COAI), the key lobby group for major telcos, said. “In our opinion, Trai’s regulation on prohibiting differential pricing constitutes a welfare-reducing measure of high concern by blocking a possible avenue for our less-advantaged citizens to move to increased economic growth and prosperity by harnessing the power of the Internet. We believe that this measure will have an impact on the government’s ambitious Digital India initiative,” Mathews added.
Most others seemingly welcomed the new rules. “With this notification, Trai has decided that all citizens of India will get the same view of the Internet which is in line with the principle of non-discriminatory access. What remains to be done is to find innovative ways to actually get all citizens access to this Internet as India’s ranking in universal broadband access is abysmally poor and the digital divide continues to widen,” Arpita Pal Agrawal, leader-telecom, PwC India, said.
The last time anything from Trai got such a reaction was 27 January’s recommendations on the pricing of spectrum to be auctioned by the government. The regulator suggested that all available spectrum across six bands—700Mhz, 800Mhz, 900Mhz, 1800Mhz, 2100Mhz and 2300Mhz—be auctioned. This would’ve been fine to an extent, but then came the reserve price suggestion—which valued the airwaves at almost Rs.6 trillion at the initial bid price—as much as the entire fiscal deficit of the country. The value for the 700Mhz spectrum alone was around Rs.11,500 crore per Mhz for 35Mhz across 22 circles. A good way to gauge the outlandishness of the pricing is the fact that the telcos, which have been complaining of lack of spectrum for the last two decades, now say it is unlikely that they will bid for the airwaves, and if they do, it will be done reluctantly.
Then, let’s not forget the call drops ruling that is in the courts. Trai ordered all telcos to compensate subscribers Rs.1 per dropped call with a cap of three calls a day, starting 1 January. The telcos said this would mean a revenue loss of Rs.54,000 crore annually, not much if you see that the industry revenues are around Rs.2 trillion and debt is estimated at just less than double this amount.

Source: Mint

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