Page 98 - SAMENA Trends - October 2021

REGULATORY & POLICY UPDATES SAMENA TRENDS

The Department of Telecommunications (DoT) has decision qualifies all telecom services/infrastructure
amended the terms of the Unified License Agreement ‘Category-I’ providers (including Basic, Cellular,
to alter the definition of Adjusted Gross Revenue United Access Services, Unified license [Access
(AGR) – the figure upon which most license and services] and other relevant operators as permitted
India spectrum fees paid by telcos are based – to remove by the Department of Telecommunications) for 100%
most income derived from non-telecom sources. The foreign ownership under the automatic route, whereas
amended system introduces a new term, Applicable previously FDI beyond 49% required prior clearance
Gross Revenue (ApGR), which excludes revenue by the government’s Foreign Investment Promotion
from other sources such as non-telecom operations, Board. A caveat remains, however, that all FDI in
interest, dividends, gains from foreign exchange telecom services will be subject to the provisions of
fluctuations and others. AGR is then calculated based Para 3.1.1 of the FDI Policy which requires any FDI
on ApGR minus certain other revenues depending on from a country sharing India’s land border to be first
the authorized service under the license. The move approved by the government. (October 7, 2021) commsupdate.com
is part of the reform package for the sector that was
approved by the government in September this year Indian telecoms operators including Bharti Airtel and
and aims to relieve some of the financial burden on the Vodafone Idea (Vi) have received notices from the
industry. Notably, the new AGR rules are effective from Department of Telecommunications (DoT) demanding
1 October 2021 and are only applicable to dues arising a cumulative penalty of INR30.5 billion (USD411
after that date. The Economic Times writes that non- million) within three weeks, relating to a 2016 dispute
telecom items represent around 10% of the industry’s over interconnection provision. The Financial Express
revenue. The definition of AGR was the subject of a writes that the action risks sparking a fresh bout of
decades-long dispute between the government and litigation in the sector just weeks after the government
the industry over the inclusion of revenue from non- approved a reform package which aims to put an end
telecom sources. The matter was mostly resolved in to legal battles by reducing regulatory burdens on
October 2019 when the Supreme Court ruled in favor of service providers and promoting healthy competition.
the DoT, leading to the imposition of backdated dues, The penalty was originally recommended by the
penalties and interest totaling trillions of rupees on the Telecom Regulatory Authority of India (TRAI) in October
sector. Mishandling of the case dragged the matter out 2016 after high levels of congestion on established
for a further two years, however, as the court refused to networks led to call failures made to and from the Jio
provide clarification on certain elements of its decision, network beyond permissible limits. The TRAI’s action
prompting further legal challenges. was ratified by the DoT’s Digital Communications
(October 26, 2021) commsupdate.com Commission in July 2019 but was suspended by
the telecoms minister. A Bharti Airtel spokesperson,
The Indian government’s Department of Industrial quoted by the Financial Express, said: ‘We are deeply
Policy and Promotion has issued a statement disappointed with the arbitrary and unfair demand
confirming a decision to allow 100% foreign direct based on TRAI recommendations of 2016 relating to
investment (FDI) in the ownership of all telecom provisions of point of interconnect to a new operator.
services and telecom infrastructure providers via These allegations were frivolous and motivated. Bharti
the ‘automatic’ route of approval, compared to the Airtel takes pride in maintaining high standards of
current 49% automatic approval threshold, as part compliance and has always followed the law of the
of the telecom reforms package announced on 15 land. We will challenge the demand and pursue the
September. As reported by the Economic Times, the legal options available to us.’ (October 4, 2021) commsupdate.com

Indonesia’s Ministry of Communication and Information Northern Sulawesi Banten, DKI Jakarta, Bogor, Depok,
(MCI, KemKominfo) has announced the completion of Tangerang, and Bekasi; West Java except Bogor, Depok,
refarming of the 2.3GHz band following the auction and Bekasi; East Java including Malang Regency and
of frequencies in May 2021. With the MCI looking to City, Kediri Regency and City, Blitar Regency and City,
Indonesia improve the quality of digital cellular services through and Madiun Regency and City; East Java including
the more efficient use of spectrum in Indonesia, in the City of Surabaya, the Regency/City of Mojokerto,
July the minister of communications Johnny G Plate and the Regency of Sumenep; and Papua, Maluku,
announced that refarming would take place from 14 and North Maluku. The refarming process was carried
July to 28 September involving ‘frequency changes at out under plans agreed with domestic operators,
15,577 Base Transceiver Stations (BTS) and carried including Telekomunikasi Selular (Telkomsel) and
out in stages in clusters in various regions’ across Smart Telecom (Smartfren) which won the 2.3GHz
the country. The nine clusters were designated spectrum. As previously reported by TeleGeography’s
as: Riau Islands; Northern Sumatra; Central Java; CommsUpdate, back in April KemKominfo issued

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