Infrastructure Sharing: Case Study India

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Infrastructure Sharing : 

Case Study India
ITU ASP COE Workshop
on
Infrastructure Sharing
31 August --3
3 September 2010
Bangkok, Thailand

Rakesh Kumar Gujral,
Deputy Advisor
Telecom Regulatory Authority of India

1
Overview
ƒ Brief on Indian Telecom Industry

ƒ Infrastructure Sharing: Need & Scope
Overview

ƒ Infrastructure Sharing in practice
• Policy and Regulatory initiatives
• Present Status
ƒ Conclusions

2
Indian Telecom Scenario (June’10)
Snapshot India
Population 1.17 billion

Geographical area 3.28 million Sq. Kms
Telecom subscribers 671.69 million

Teledensity 56.83 %

Fixed line subscriber 36.18 million

Wireless subscriber 635.51 million

Monthly mobile additions 17.98 million

Broadband subscribers 9.45 million

3
Licensing Framework
• India  is  divided  into  22  Service 
Telecom Licensing Framework
Areas/Circles Jammu &
Kashmir

Himachal
Pradesh

• Access  Providers  licensed  on  the  Punjab


Uttar
Haryana Prade
basis of Circles sh W

DELHI
Rajasthan Uttar
Pradesh E
Bihar
• Inter  Circle  calls  to  be  routed  Gujarat Madhya
West
Bengal
Pradesh
through  National  Long  Distance 
Orissa KOLKATA
Operator. Maharashtra

MUMBAI

Andhra
Pradesh

• International  Calls  to  be  routed  Karnataka


METRO Circles
through  International  Long  CHENNAI
A Circles
Distance  Operator  (ILDO)  directly  Tamil
B Circles
Nadu
or indirectly through NLDO Kerala

C Circles

4
Telecom Licensing Framework (Contd.)

Main Telecom Licence
Licensor
Basic Service Cellular Mobile
Dept of Telecom

Unified Access Service
Regulator
Telecom Regulatory  National Long Distance
Authority of India
International Long Distance
Judiciary
Telecom Dispute  Internet Service Provider
Settlement Appellate 
Tribunal

5
Telecom Licensing Framework (Contd.) Licence Telecom Services Provided No. of Licencees

2
Basic Service Wireline Telephony, WLL

Cellular Mobile  38
Wireless Telephony
Telecom Service

Access service including Wire line, Wireless 
Unified Access  Telephony, Internet access services, Triple  240
Service Play including IPTV

National Long  Domestic Long Distance service, IP‐VPN,  29
Distance Domestic Leased Circuits
International Long Distance service, IP‐VPN, 
International  IPLC 24
Long Distance

Internet Access Service, Restricted Internet 
Internet Service  telephony
373
Provider

6
Telecom Licensing Framework (Contd.) Aug.
Aug.2000
2000
Infrastructure
Provider

IP-II
IP-II
IP-I
IP-I • can lease / rent out
• can provide assets /sell end to end
such as Dark Fibre, bandwidth
Right of Way, Duct • Indian registered
space & Tower companies are eligible
• Permission through to apply
simple registration • 74% FDI
• No License Fee Issuance discontinued
(Dec 2005)
• 100% FDI • NLD entry fee reduced
Scope Enhanced (Rs.1 billion to Rs 25 Mn)
• NLD Licence fee reduced
(March 2009)
(15% to 6% of AGR)
• Can create active
• IP-II allowed to migrate
infrastructure, if
to NLD
created on behalf
of licencee

7
Tariffs
• Regulated in the initial days.
• After emergence of competition‐
brought  under  forbearance  except  roaming,  leased  circuits  and 
rural fixed line.
Tariffs and IUC

Interconnection Usage Charges
• Interconnection Usage charges (IUC) were specified by TRAI for 
inter‐operator payments.
• Governed by IUC Regulations.
• Recent  amendment  dated  9th March  2009  (effective  from 
01.04.2009)

8
Existing Interconnection Usage Charge
Origination Charge Under Forbearance

Termination Charge Uniform for all types of domestic calls viz fixed to 


fixed, fixed to mobile, mobile to fixed and mobile 
to mobile. 
20 Paise/minute (about 4 Cents/minute
/minute ( )
Termination charge for 3G Same as 2G voice calls
Existing IUC

voice calls
Termination  charge  for  40 paise per minute (about 8 Cents/minute)
incoming  international 
calls
Domestic Carriage charge Ceiling of Rs 0.65 per minute 
(about 13 Cents/minute)
International  Carriage  Under Forbearance.
Charge
IUC for SMS Under  forbearance.  However,  these  charges 
should  be  transparent,  reciprocal  and  non‐
discriminatory.

9
ARPU & MOU of Mobile Service Providers (QE March 2010)
GSM Subscriber 82%

CDMA Subscribers 18%
Average Revenue Per User (ARPU) GSM INR 131
ARPU & MOU

(about 2.79 USD)
Average Revenue Per User (ARPU) CDMA INR 76 
(about 1.62 USD)
Minutes of Usage (MOU) GSM 410 Minute

Minutes of Usage (MOU) CDMA 307 Minute

10
Service Provider wise market share of Wireless services (As on 
30.06.2010)
Mobile Network

11
Explosive mobile subscriber growth requires:
Need for Infrastructure Sharing
• New Infrastructure like towers etc Disturb esthetic of 
Disturb esthetic of 
Cities
• Additional space for hosting of towers Cities

• Additional spectrum
• More interconnection.
Underserved areas coverage

Infrastructure creation requires huge capital expenditure

The  Infrastructure 
answer  Sharing
is

12
Infrastructure  Sharing ‐ Refers  to  the  sharing  of  resources 
and/ or network facilities between one or more operators. 
Infrastructure Sharing

Improve Reduce
Infrastructure
Utilization Sharing
Duplication
QoS Objectives Cost

For
Should not affect ForSubscriber:
Subscriber:
Affordable
Affordable
For
ForService
Service Infrastructure Development Tariffs
Providers:
Providers: Tariffs
Faster
Faster
Rollout
Rollout
13
Infrastructure Sharing in Practice
Copper

Internet Exchange Passive Mobile N/w


(e.g. Tower)

Cable Landing Active Mobile N/w


Station (Excluding Spectrum)

Infrastructure
Sharing
Spectrum
Modes
Fiber

National & Intra Circle


Roaming
Domestic Leased
Circuits
IN Platform
Collocation

14
Sharing of Copper (Local loop)

% Market share BSNL


Fixed Wireline Market as on 30th June 2010 75%

• Historically  been  dominated  by 


Reliance MTNL
the incumbents. 3% 10%
Sharing of Copper

• Growth was steady over the years  Tata
3%
Shyam HFCL
Bharti
0.1% 9%
until around 2004. 0.5%

• Thereafter,  Fixed  mobile  Subscribers in Million as 584.32

substitution  setting  in,  there  has  on 31st March of the Year


been negative growth in fixed line  391.76
connections.
261.07
Sharing of Copper (Local Loop)
• Not Mandated 165.11

• Limited Availability of copper. 98.77
52.2241.54 40.75 39.42
41.43 37.96 36.96
• The  growth  in  Copper  network  is 
dismal. 2005 2006 2007 2008 2009 2010

Wireline Wireless

15
Mobile Network

Passive
Passive
Infrastructure
Infrastructure Active
Active
Mobile Network

Backhaul
Backhaul Infrastructure
Infrastructure

• Physical Sites • Antenna


• Buildings Intermediate • Feeder
•Shelters Links •Cables
•Towers between •Node-B
•Power the Core & •Tx. eqpmt
•Battery Sub networks •Spectrum
backup

16
Mobile Network (Contd..)

Passive Site Sharing: Operators acquire and rent a common site to host
the Base Transceiver Station (BTS) space in shelter or transmission
room, real estate space etc.

Active Site Sharing: Operators agree to share active equipments such


as antenna systems, cables, filters, etc.
A common site is acquired for the purpose of housing the operator’s
individual Node B along with the use of common antennas and feeders,
masts and cables.
17
TRAI’s recommendations to the licensor (DoT) on
Infrastructure Sharing (11 April 2007)
z Passive infrastructure sharing not mandated though encouraged.
TRAI’s Recommendations of 2007

z Active  infrastructure  sharing  facilitated  by  modifying  restrictive 


clauses in the existing licenses.
‐ TRAI  recommended  that  Access  providers  to  be  allowed 
to share active infrastructure, limited to antenna, feeder 
cable,  Node  B,  Radio  Access  network  (RAN)  and 
transmission system only.
‐ Spectrum Sharing was not recommended at that time.

z Financial  support  for  creation  of  infrastructure  in  rural  and  far 
flung areas was recommended.
z Use  of  non  conventional  energy  sources  in  areas  where  electric 
power supply is erratic should be encourage.
Recommendations accepted by the Government 
Guidelines released in April 2008

18
PROJECT MOST
• To encourage tower sharing among the operators, 
Govt. of India  initiated project “Mobile Operator 
Tower Sharing

Shared Tower (MOST)” in March 2006.

Flagship Sight: Delhi High court
2 Roof‐top Towers of 15 meter height.
First Tower
‐3 Operator Sharing (GSM) ‐Airtel, Hutch    & Idea
‐ Single Tower supporting 9 GSM & 3 Microwave antenna.
Second Tower
– 3 Operators Sharing (1 GSM + 2 CDMA) (MTNL, Reliance & TTSL)
PROJECT MOST
Ground Based Towers of 40 Meter 
height
Tower Sharing (Contd..)

6 Operator Sharing 
(4  GSM  +  2  CDMA)  Airtel,  Hutch,  Idea, 
MTNL, Reliance & TTSL
Single  Tower  supporting  12  GSM,  6 
CDMA & 6 Microwave Antennas
Tower Design Certified by IIT, Delhi
Tower Sharing
• Estimated  requirement  of  towers  is 
0.5 million by 2015.
• Tower  infrastructure  is  increasingly 
Tower Sharing

becoming  independent  of  telecom 


operators. Source: IDBI Bank
• At  present  there  are  about  0.3 
million Towers. Level of Tower Sharing
Unshared
• About 60% towers are being shared. Towers
40%
Shared
• Average Tenancy is about 1.5. Towers
60%
Business models used for Tower Sharing
Captive
• Towers are owned & operated by telecom operators.
Tower Sharing (Contd..)

Operator Controlled entity


• Operator consolidates tower infrastructure &
• Transfer to a separate operator owned entity.
(WTTIL,Bharti Infratel, Reliance Infratel)

Pool and share


• Operators jointly set up an independent company.
• Each  operator  contributes  infrastructure  to  the  joint  entity  or 
venture. Indus (Bharti, Vodafone, Idea)
Build and operate
• Independent  tower  companies  builds  &  manages  tower 
infrastructure. 
• Leased to operators under long term contracts.
(e.g. Quippo, ATC, Tower vision)

22
Tower camouflaged as a tree
Innovations in Tower Designing

Tower Tube
The Wall Street Journal
Technology Innovation Award 2008
23
Increased level of sharing: Issues
• Large no. of antennas on a tower: concern of radiation
Tower Sharing (Contd..)

• Load Bearing Capacity
• Installed on the roof top: Safety issues

• Permission from Local Civic Authorities.

• Right  of  way  (ROW)  for  tower  installation  and  laying  of  backhaul
network.
• Pollution generated through DG sets.

TRAI  is  in  the  process  of  issuing  consultation  paper  on    the 
above issues.

24
• With the prior permission of the licensor
• Permission for max. 5 years. No renewal.
Sharing of Spectrum • In the same licence service area.

• Existing license conditions  • Only  between  the  parties  so  long  as  each  of 
whom does not  hold more than 4.4/2.5  MHz 
do not allow Spectrum 
of spectrum (GSM/CDMA).
sharing.
Spectrum Sharing

• Only if there are at least six operators in the 
• TRAI in its  LSA, post‐sharing arrangement.
recommendations dated  • Not  permitted  among  licensees  having  3G 
11th May 2010  spectrum.
reconsidered this issue. • Leasing not permitted.
• Will  deemed  to  be  considered  sharing  their 
entire spectrum, for the purpose of charging.
• TRAI recommended that 
spectrum sharing be  • Both the parties will pay the prorated current 
allowed (limited to access  price for spectrum beyond 6.2/5 MHz, in the 
ratio  of  the  spectrum  held  by  them 
spectrum only), subject to individually.
• Spectrum  usage  charges  will  be  levied  on 
both, but on the total spectrum held by both 
the operators together.

25
National Roaming
• Roaming:  Ability  for  a  cellular  subscriber  to  make  &  receive  calls 
and  have  access  to  services,  when  travelling  outside  the 
geographical coverage area of the home network by means of using
a visited network.
National Roaming

• When  home  network  and  visited  network  are  both  in  the  same 
country, it is called national roaming.

• National  roaming  is  relevant  for  India  as  the  licences  are  service 
area wise.

• Roaming  arrangements  between  the  operators  are  on  mutual 


agreement basis.
• Ceiling has been specified by TRAI for roaming tariffs.
http://www.trai.gov.in/WriteReadData/trai/upload/TariffOrders/61/torder24jan07.pdf

26
Intra Circle Roaming
• Intra Circle Roaming is permitted since June 2008.
Intra Circle Roaming

• Service  providers  can  enter  into  commercial  arrangements 


for  intra  circle  roaming  facilities  with  other  licences
CMTS/UAS license.
• Service providers are mandated to inform Law enforcement 
agencies (LEA) about their intra circle roaming arrangements.

• Some  of  the  service  providers  already  entered  into  such 


agreements.
• Such initiative has benefited New licencees:
– to quickly expand coverage and 
– in instances where initial cash flow is limited.

27
3G and BWA 
• In India, auctions for 3G and BWA has been recently
completed.
• Apart from State owned PSU, three private operators in a
service area have been given spectrum of 5Mhz for 3G.
3G & BWA

• For provision of BWA, two private operators and the State


owned PSU were given 20 MHz.
• 3G technology requires dense coverage and would require
a number of base stations to deliver capacity as per
demand.
• Existing towers can be used.

• Proper infrastructure sharing can act as a better solution for


faster rollout.

28
Inter operator Sharing of IN Platform
Intelligent Network: Telecommunication Network Architecture
for provisioning of advanced Services which are not normally
available in the switching systems.
e.g. Virtual Calling Cards (VCC), Free phone services,
IN Platform Sharing

Televoting etc.
• Prior to issue of IN services Regulation, the subscribers were
able to access the IN services of their own Access Service
Provider.
• To ensure that subscriber should be able to access, IN
services of all other service providers, TRAI issued Intelligent
Network Services in Multi Operator Multi Service Scenario
Regulations, 2006 (13 of 2006) in November 2006.
• For free phone services, most of the service providers have
entered into arrangements on mutual agreement basis
• TRAI has specified origination charge for IN based free phone
service on 5th December, 2007.

29
Calling Cards by Long Distance Service Providers
• To  provide  choice  to  the  consumer  to  select  long  distance 
IN Platform Sharing (Contd..)

operator
• To further enhance competition
• TRAI  has  recommended to  the  DOT  in  August  2008  to  allow
NLDOs /ILDOs to have direct access to consumers for provision 
of  national  and  international  voice  telephony  services, 
respectively, through calling cards.

• Recommendations accepted by the Government.
• NLD/ILD license amended accordingly (August 2009).

30
Collocation facilities
• For the purposes of providing interconnection, certain
equipment has to be placed or collocated at the one service
provider’s exchange by the other service provider.
• Types: (a) Physical Collocation (b) Virtual Collocation
• The Collocation facilities include:
• Building Space
Collocation

• Power
• Environmental Services
• Security
• Site maintenance
• To frame guidelines so that the fixation of Collocation
Charges by service providers is not done arbitrarily and is
based on use of sound criteria, TRAI issued a consultation
paper on “Collocation Charges” (March 2010).
• OHD held on 6/8/2010, Service Providers assured to
discuss amongst themselves and come back with
consensus on charges.

31
PoP of PoP of PoP of PoP of
Access NLDO Access
Provider NLDO Trunk Provider
Access Access
Segment Segment Segment
Sharing of Domestic Leased Circuit
Local Lead Local Lead

Local Lead Local Lead

Customer Customer
PoP PoP

Customer Site
End-to-End
Domestic Leased
Circuit (DLC)

Domestic Leased Circuits
• As on date, domestic bandwidth can be provided to end user by Access 
Provider or NLDO.
• Tariffs for DLC are regulated and prescribed in TTO.
• TRAI issued DLC Regulations on 14th September 2007 :
• To ensure transparency, reasonableness
• To allow provision of DLC/local lead in a non‐discriminatory 
manner

32
Optical Fiber
Advantages:
9 Necessary  to  support  high  bandwidth  requirement  in  Core 
network.
9 Also desirable in access network 
9 Reliable, stable and long term solution.
Fiber Sharing

9 Can provide enormous bandwidth to support Broadband.
9 Capacity  of  the  Optical  fiber  to  carry  information  can  be 
enormously enhanced by just upgrading the end equipments.
• Presently  about  7,50,000  route  Km of  optical  fiber  network  is 
available in India.
• It  includes  5,00,000  route  Km  optical  fiber  network  of  state 
owned BSNL.
• TRAI’s consultation  paper  dated  10.06.2010  on  “National 
Broadband plan” emphasized the need to build “National Optical 
Fiber Network”, which extends up to village level.
• National Optical Fiber Network is proposed to be shared among 
operators.

33
Proposed “National Optical Fiber Network”
Options for funding
Fiber Sharing (Contd..)
TRAI  estimated  cost  for  covering  all  villages  with  optical  fiber
(excluding RoW Cost) Rs 323 billion (Approx).
Options suggested for funding in the consultation paper:
• Funding through USOF (if labour cost can be managed 
through other ongoing projects).
• Creation of an Autonomous National Level Agency.
‐ All Optical fiber network resources may be handled by this 
agency for laying, maintenance and leasing purposes. 

‐ Such OF structure shall be shared by all Public/ Private users.

• PPP
• Consortium

34
IPLC & Resale
TRAI has prescribed tariffs for IPLC in TTO.

Earlier, IPLC can be provided only by International Long Distance Operators 
(ILDOs).
To  promote  competition  and  affordability  in  International  Private  Leased 
Circuits (IPLC) Segment TRAI recommended for Resale in IPLC Segment.

“Resale” is the sale or lease of telecom services to an end consumer 
on  retail  basis  after  leasing  from  a  telecom  service  provider  on
commercial basis at wholesale prices.
IPLC

The  Resellers  can  access  the  subscribers  for  provision  of  IPLC  only 
and not for any other purpose.
Promote non‐facility / minimum facility based competition

Recommendations accepted by Licensor

Licence agreement for Resale of IPLC Service may be seen at
http://www.dot.gov.in/Resale%20of%20IPLC/Resale%20of%20IPLC‐index.htm

35
Sharing At Submarine Cable Landing Station
• A number of submarine cables are landing or terminating in India
at CLS operated and managed by few ILDOs.
Capacities of Submarine Cables in India (October 2006)
Cable Landing Station

Source: TRAI Consultation Paper dated 13th April 2007

36
Sharing At Submarine Cable Landing Station
• Access to these CLS by other licensees is necessary for
Cable Landing Station(Contd..)

‐ creating a conducive environment & 
‐ boosting  competition  in  the  international  bandwidth 
connectivity.
• TRAI  issued  Regulations  on  “International  Telecommunication 
Access  to  Essential  Facilities  at  Cable  Landing  Stations 
Regulations, 2007” on 7th June 2007.
• The regulations provides for
- Time limit for provision of access, collocation and landing facilities.
‐ The  owners  of  CLS    are  mandated  to  publish  “Cable  Landing 
Station  – Reference  Interconnect  Offer  (CLS‐RIO)” with  the 
approval of the Authority.
‐ Transparent charges for access, collocation and landing facilities;

This  regulation  has  been  enabling  non‐discriminatory,  fair  and 


open access at the cable landing stations.

37
National Internet Exchange Of India (NIXI)
• Set  up  on  the  recommendation  of  TRAI  by  Department  of 
Information Technology (DIT), Government of India in 2003.
• Purpose : To facilitate exchange of Internet traffic originated and 
destined  within  the  country  among  peering  Internet  Service 
Internet Exchange

Provider (ISP) members.
• The key objective of NIXI is to:
• enable domestic bandwidth utilization  for  routing  of  the 
domestic traffic.
• improvement  in QoS in  terms  of  lower  latency  and 
number of hops. 
• help  to  effectively  utilize  International  Internet 
bandwidth for routing International Internet traffic.
• TRAI also recommended to improve effectiveness of NIXI, on 20th
April 2007.
• Presently  7  nodes  of  NIXI  are  operational  and  2  are  underway. 
(More details may be seen at www.nixi.in ).

38
USO Fund & Infrastructure Sharing 
About 71% of the population resides in rural areas.
Liberalization  &  Competition  is  not  enough  for  rural  areas 
penetration due to:
• Scattered Population
• Low income
• Low Usage
USO Fund

• Lack of Industry/ Commercial User
• Lack of Infrastructure, Road, Power etc
• Difficult Terrain
• Higher CAPEX & OPEX and Low ARPU
• Constrains in both supply and demand side
• Role  of  USO  is  to  provide  Access  in  rural  and  remote  areas  at 
affordable rates.
• In India, USO Fund was setup in 2002.
• Encourage sharing of Infrastructure at discounted rates is one of 
the way adopted by USO Administrators to fulfill their Role. 

39
Infrastructure Support For Mobile Services 
• One  of  the  project  supported  by  USO  is  Infrastructure  support 
Support from USO Fund
for mobile services.
• This  project  was  started  in  October  2006  to  create 
infrastructure for rolling out mobile services in rural areas.
• Project consists of two parts:

• Ist    part :  Setting  up    of  passive  infrastructure  sites 


comprising  of  land,  tower,  electric  power  connection, 
power  backup  (generator)  etc.    in  identified  rural  and 
remote areas.
• IInd Part : Provisioning of mobiles services by access service 
providers  by  BTS  equipments  installation  with  associated 
antenna and backhaul. 
Initially  the  infrastructure  created  will  be  for  voice 
telephony which can later be used for broadband services 
as well. 

40
Infrastructure Support For Mobile Services 
Part‐ I
• The Infrastructure Provider (IP) shall be solely responsible to set 
Support from USO Fund

up, operate and maintain infrastructure site.
• The  infrastructure  so  created  shall  be  shared  by  maximum  3 
USPs  to  provide  mobile  services  by  installing  necessary 
equipments.
• Subsidy is payable for a maximum period of 5 years within the 
validity period of agreement.
• IP shall enter into SLA with the USPs for 5 years period to ensure 
continued provision of services.
• IP shall not charge any rental from the USPs during this period.

• The new tower/ infrastructure sites shall not be installed within 
3  Km  radius  of  already  installed  by  any  access  provider  for 
providing fixed wireless or mobile services.

41
Conclusions
• In countries, where the number of operators are
considerably large, the environment is conducive for
infrastructure sharing.
• Regulators and policy makers should encourage
sharing of infrastructure.
• Passive infrastructure sharing among service providers
Conclusions

on mutual agreement basis may be preferred rather


than regulatory mandates.
• Infrastructure sharing is usually commercially driven,
however constant regulatory watch and time to time
appropriate broad guidelines are necessary.
• Facilitation of active infrastructure sharing is required
however to allow sharing of some of the active
components like spectrum, requires more market
specific analysis.
• Focus should also be on the nationwide infrastructure
creation like National Fiber Network. This will promote
broadband in uneconomic areas thereby reduce digital
divide.

42
Conclusions
• Use of non conventional energy sources must be
encouraged.
• Financial support for creation of infrastructure in rural
and far flung areas.
Conclusions

43
Thank You
R K Gujral
Deputy Advisor
(Interconnection & Fixed Networks)
Telecom Regulatory Authority of India
J.L. Nehru Marg, New Delhi – 110002

Email: rkgtrai@gmail.com

9/2/2010 TRAI 44
44

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