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Trai starts consultation for bigger play by infrastructure providers
Posted on 17th August 2019
NEW DELHI: The telecom regulator has started a consultation process to take a relook at the business scope of infrastructure providers in the country and encourage active infrastructure sharing at a time when telecom operators are battling shrinking revenue streams and looking at cost-cutting measures.

Infrastructure creation by standalone companies that do not directly compete with telecom operators needs to be promoted, the Telecom Regulatory Authority of India has suggested.

At present, passive infrastructure, such as ducts, towers, poles, equipment rooms can be created and shared by infrastructure providers category-I (IP-I) as well as telecom operators, but the creation and sharing of active infrastructure such as antenna, feeder cable and radio access network is permitted to licensed telecom operators only.

Enhancing the scope of infrastructure providers category-I (IP-I) and allowing active infrastructure sharing may attract investments in this sector, create economies of scale, and result in savings in capital and operating expenditure for operators, the regulator said a consultation paper on the review of scope of infrastructure providers category-I (IP-I) registration floated late on Friday evening.

Comments can be submitted till 16 September and counter-comments till 30 September.

IP-I are those infrastructure providers that provide assets such as dark fibre, right of way, duct space and tower on rental or sale basis to licensees of telecom services.

In simple terms, they cannot own and share active infrastructure and only install this on behalf of the licensed telecom operators.

The regulator believes that now infrastructure creation by standalone companies that do not directly compete with telecom operators needs to be promoted to boost telecom infrastructure and to reduce the cost of capital for operators.

“It will also help in attracting investments from entities providing infrastructure funds that are interested in long-term returns," Trai said.

The government is currently working on finalising the roadmap for roll-out of 5G services and wants to hold an auction this year itself.

5G will also require deployment of a large number of small cells which would mean more base transceivers stations as compared with existing networks.

Operators, which are currently battling shrinking revenue streams as a result of a tariff war started by Reliance Jio, will need to upgrade existing mobile networks to 5G and thus require fresh capital infusion at an accelerated pace.

“The upgradation of the existing mobile networks to 5G and network densification requirements may create a greater incentive for fiberisation of the networks. Fiberisation of telecom networks by each licensee in non-sharing mode may be quite a costly proposition and would increase the cost of service delivery. Consequently, there might be a greater impetus for new models of infrastructure sharing and creation," the regulator said in the paper.

Related Companies: Telecom Regulatory Authority of India   

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