Infrastructure | Network Management | Regulation | Tariff Policy & Competition
February 20, 2018

India’s experience in passive network infrastructure sharing

By R.S. Sharma, Chairman, Telecom Regulatory Authority of India (TRAI), India

ITU News asked Chairman R.S. Sharma about telecoms infrastructure sharing in India, currently the largest telecommunications market.

What made India leap ahead in 2007 to become one of the first to allow passive network infrastructure sharing?

R.S. Sharma In 1994, the tele-density in India was a meagre 0.89. In order to boost the growth of telecommunication services in the country, huge investments were required in the telecom sector.

Equally critical were efficiency issues. With the premise that opening of the sector attracts investments, fuels efficiency, and in turn results in tele-density growth, the Indian telecom sector was opened up to competition in 1994. The results were fantastic.

After a tepid beginning, the telecommunication services sector, in the new millennium, entered into a virtuous cycle of growth on the shoulders of many initiatives taken by the Department of Telecommunications (DoT) and the telecom regulator (TRAI).

Recognizing the fact that the building of telecom infrastructure is highly capital intensive, DoT permitted licensed telecom service providers to share passive infrastructure with other licensed telecom service providers.

In the year 2000,  DoT introduced a new class of service provider called Infrastructure Provider Category – I  (in short, IP-I), who could provide passive infrastructure such as dark fibre, right of way, duct space, towers, etc. to licensed telecom service providers.  However, the willingness of licensed telecom service providers to share towers was initially low because the licensed telecom service providers had apprehensions that the sharing of towers would result in huge churn, as the other licensed telecom service provider would have almost the same coverage area and quality of service (QoS).

In this background, TRAI received a reference from the Government of India in the year 2006 seeking TRAI’s recommendations on ways to ensure the effective sharing of telecom towers by the mobile service providers. After a comprehensive consultation process, TRAI made its recommendations to the Government in the year 2007.

The following are salient features of such recommendations:

  • To encourage passive infrastructure sharing among licensed telecom service providers on a mutual agreement basis.
  • To bring in transparency, reasonability and a well-defined time frame to facilitate infrastructure sharing.
  • To lay down well-defined mechanisms to facilitate infrastructure sharing in critical areas (where possibility to erect towers is limited).
  • To facilitate active infrastructure sharing by modifying restrictive clauses in the existing licence.
  • To develop a mechanism to provide financial support for the creation of infrastructure in rural and far-flung areas.
  • To encourage the use of non-conventional energy sources in areas where electric power supply is erratic.

In the aforementioned recommendations, TRAI specifically noted that “…mandating passive infrastructure sharing at this stage is not required.

After receiving the TRAI’s Recommendations, DoT, in the year 2008, formulated guidelines for the sharing of active infrastructure, simplification of frequency allocation procedures and enhancement in scope of the Universal Service Obligation (USO) subsidy support scheme. After these guidelines came into force, the sharing of telecom towers was keenly adopted by telecom service providers.

Many incumbent telecom service providers hived off their tower segments into separate telecom infrastructure companies. In one case, a consortium of telecom service providers came together to form a joint venture in infrastructure sharing.

For more infrastructure-sharing insights from top ICT leaders, read our latest ITU News Magazine edition.

What have been the benefits to the population in terms of higher connectivity and lower prices?

R.S. Sharma The policy and regulatory impetus on passive network infrastructure sharing has made perceptible improvement in the pace of roll-out and delivery of telecommunication services in both urban as well as rural areas. It is estimated that the cost for space and energy gets reduced by about 20% for both telecom service providers when a telecom service provider shares a tower with another telecom service provider. The telecom service providers appear to have passed on the benefits of cost reduction to the consumers as can be seen from the trend of decline in consumer tariffs. The falling tariffs have made telecommunication services more affordable in India.

Though there are numerous factors which led to the explosive growth of the telecommunication services sector in the country, passive infrastructure sharing played an important role in this growth.

Today, the telecom services are ubiquitous and are enjoyed not only in the bustlling streets of a metropolis but also in the hinterland villages of the country. From a mobile tele-density of 22.78 in March, 2008, the mobile tele-density leapfrogged to 91.08 in March, 2017. The average mobile tariffs for outgoing voice calls declined from  0.92 per minute in March, 2008 to  0.31 per minute in March, 2017 (At present 1 USD = 64.84).

RELATED: Google makes a big play for the mobile Internet market in India

The chart below depicts the growth in the telecommunication subscriber base and the decline of telecom tariffs from 2008 to 2017.

Do you have any lessons learned from the past ten years of infrastructure sharing in India?

R.S. Sharma Our experience in India suggests that passive infrastructure sharing enables speedy growth and rollout of telecommunication services, especially in developing countries.

It also brings down the capital cost and operating cost of networks. Governments and regulators need to be proactive in devising enabling frameworks for passive infrastructure sharing to boost the growth of the telecom sector.

R.S. Sharma, Chairman, Telecom Regulatory Authority of India (TRAI), India
  • Was this article Helpful ?
  • yes   no
© International Telecommunication Union 1865-2018 All Rights Reserved.
ITU is the United Nations' specialized agency for information and communication technology. Any opinions expressed and statistics presented by third parties do not necessarily reflect the views of ITU.

India's experience in passive network infrastructure sharing

Send this to a friend