Trai to push DoT for separate license for wholesale access network provider

Trai to again write to DoT arguing its case; move to see creation of new industry vertical in telecom space, bring in more domestic and foreign players

The Telecom Regulatory Authority of India (Trai) is expected to push the Department of Telecom (DoT) again to accept its recommendations on the creation of a separate category of licence for access network provider (ANPs) on a wholesale basis. While DoT had rebuffed the idea, sources said Trai will again write to the department arguing its case, and the issue will be discussed soon.

Last year, Trai recommended that ANPs can build complete telecom networks to provide its services as a vendor to telecom operators, internet services companies, among others, on a wholesale basis. But DoT argued against the idea, saying significant market demand did not exist for such licences. 

If implemented, it will create a new industry vertical in the telecom space and bring in more domestic and foreign players. Trai has also pointed out that it will lead to reduced costs for everyone, including the three telecom service providers — Reliance Jio, Bharti Airtel and Vodafone Idea. In such a scenario, the move might also allow the Adani Group to gain a foothold in the telecom market without directly competing with Mukesh Ambani's Reliance Jio.

Globally, any company that provides internet access to private customers and businesses by connecting subscribers to their immediate service provider is considered an ANP. This includes both internet access providers (ISPs) and online service providers (OSPs). However, Trai’s recommendations do not permit ANPs to directly provide services to the end customers under the authorisation, as a result of which they are not expected to compete with the telcos, an official said.

The sectoral regulator has stated that the licence would funnel more investments into the sector since 5G has different use cases for ANPs across economic verticals. “Trai believes these recommendations will obviously attract investments, strengthen the service delivery segment, and could very well become a launchpad for 5G services when it comes to the needs of Industry 4.0,” he stressed. He added that this would also lead to an increased sharing of network resources and reduction of cost.

Trai has mandated the scope of the ANPs will be to establish and maintain access networks, including wireless and wireline access networks, and selling the network services — capable of carrying voice and non-voice messages and data on a wholesale basis to virtual network operators (VNOs). VNOs are providers of management services and a reseller of network services from other telecommunications suppliers. They do not own the underlying core networks, are service delivery operators and treated as an extension of network service operators. VNOs are not allowed to install equipment interconnecting with the network of other NSOs. No spectrum is assigned to VNOs.

TRAI has also recommended that ANPs should also be permitted to acquire spectrum through auctions, subjected to the prescribed spectrum caps, enter into spectrum trading and sharing arrangement with other ANPs and unified licensees with access authorisation.

Unbundling of licences

A key reason for Trai’s insistence on the ANP recommendations is its stated policy position that the government should unbundle different layers of telecom operations through differential licensing.

The current unified licence offers service-wise authorisations for establishing service-specific networks and provide authorised services. This does not guarantee spectrum, which has to be obtained separately according to prescribed procedure, for different services. Case in point, only one unified licence is required for all telecom services in the entire country.

Expanding the existing licensing regime into specific licences for different layers such as infrastructure, network, services, and application layer, is crucial for reforming the licensing and regulatory regime to catalyse investments and innovation, as well as to promote ease of doing business, another official said. This is also one of the strategies of the government’s ‘Propel India’ mission, under the National Digital Communications Policy (NDCP) 2018.

New players in telecom space soon ?

• Advent of 5G has created major potential for ANPs among enterprise and industrial users 
• The move may allow the Adani Group to gain a foothold in the telecom market
• TRAI pushing for unbundling of different layers of telecom operations through differential licensing.
• Only one Unified License is required for all telecom services in the entire country.