Trai Chariman RS Sharma says call failures due to points of interconnect unacceptable

Based on data related to Points of Interconnect (PoIs) submitted to the Telecom Regulatory Authority of India (TRAI) by telecom operators including Bharti Airtel, Vodafone India and Idea Cellular with respect to Reliance Jio, the telecom regulator’s Chairman RS Sharma said the call failure rates are unacceptable.

The data was collected between September 15 and September 19 and the reason for the high call failure rate is PoI congestion, and TRAI will ask telcos for an explanation on the issue. Sharma said once the explanations are examined the regulator will take a call whether or not a meeting of telcos should take place.

He added that telecom operators need to comply with regulations on PoIs. While telcos have argued that Jio’s introductory offer is predatory, the TRAI Chairman said there’s no reason for the TRAI to intervene in the matter as Jio’s offer prices are under forbearance.

What do you make of this, everyday there are claims, counter claims, allegations, counter allegations, virtually name calling now. As the regulator do you feel helpless, do you feel frustrated, do you feel disappointed, what is the sense that you get?

What you are referring to is the issue of the point of interconnect. What we had done and actually there are specific quality of service norms set out by Telecom Regulatory Authority of India (TRAI) as also the licensing conditions which stipulate that there shall be adequate number of point of interconnect so that the call failures do not exceed 0.5 percent as per our quality of service regulations.

What we had done was we had called for the data from the service providers during the period September 15 to September 19, and we have got all the data now broadly. W are studying the data, and we will take appropriate action to ensure that the norms of the quality of service and the call failure they are not violated. It is an issue among the service providers. However, most importantly it is an issue for the customers.

You said that you asked all telecom operators to provide you data to assess congestion on their network between September 15 and September 19. Today is September 26, what does your analysis tell you today? If I go by press releases that companies are putting out the latest press release seems to suggest that there is 12 crore call drops per day between Jio, Vodafone, Airtel and Idea. Does your analysis corroborate these numbers?

I will not go specifically into the numbers. I can only say that the numbers which have come in as against 0.5 percent call failure maximum the numbers are really unacceptable, not call drops, let us not call them call drops they are basically call failures.

For example, a customer of operator A calls customer of operator B and the call does not go through then that is actually the point of interconnect comes in between, and that is call failure.

So, you are saying the call failure rate today is unacceptable? It is certainly unacceptable

I can only go by the data that is being provided to us by individual telecom operators, Idea, for instance, says that it has upped its capacity to Jio by 230 percent, similar representations or claims have been made by other telecom operators as well. Do you believe that there has been actual improvement in terms of enhancing capacity or points of interconnect to Jio or not because that is the claim that Jio is making?

Let us not get into the numbers because we are not monitoring, or we are not saying how many points of interconnect you will put up, that is not the issue. We are going to measure the outcome, how much call failure must be permitted, beyond that it will not be permitted. So, adequacy or inadequacy of the point of interconnects in terms of numbers we are not monitoring that. We are monitoring the outcome.

That outcome as I explained to you is really what data we have got of the call failures and these are certainly unacceptable.

What would you attribute that because again if I look at what one side claims which is the incumbent telecom operators, they are saying it is on account of deficiencies of Jio’s own network. Jio claims that it is on account of the points of interconnect which are not being adequately provided, so what are we to make?

If the call failure rates are unacceptably high, the only reason for this can be the inadequacy of point of interconnects. If the call is failing in one operator’s domain itself, that has nothing to do with point of interconnect. So, essentially it is the point of interconnect congestion which is what we are going to talk about.

So, you are saying the call failure largely is on account of point of interconnect failure?

That is what I have been able to make out because we have specifically asked for the data as to what are the numbers of call failures due to point of interconnect. So, what can we expect from hereon because you have analysed the data, you will continue to analyse the data, you have already called for one meeting where you have got all sides together, all stakeholders together, where you got a commitment from incumbent telecom operators saying that they would enhance points of interconnect to Jio, so where does one go from here? After we got the data we will ask the operators wherever we find that the levels of call failures are much higher, wherever there are violations of the quality of service norms or licensing conditions prima facie, we will ask those operators to explain as to why this has happened.

If they were not to be able to adequately explain, what is the action that you can take?

Let us not hypothecate as to what will happen subsequently. The next step in the process is to call for explanations from them as to what is the reason for such high call failures.

What is the provision under the TRAI Act? There are many provisions as to what kind of action can take place. I am not going to specify as to what will happen because we will have to study the responses of the operators on this issue and thereafter only we will take the steps.

Are you going to call in another meeting, are you going to call all stakeholders, all telecom companies for another meeting?

We will take a decision in a couple of days on that issue.

What are you waiting for, are you waiting to go through the fine print? We have got the data; we are going to call for the reports from the operators concerned and then we will see whether calling another meeting will really solve the issue. Certainly, as regulators, we are concerned with this unacceptable level of call failures.

Let me then ask you about another issue that has been raised and that is whether the offer by Jio which is the introductory at this point in time amounts to predatory pricing. What is the TRAI’s view on that? Our view is that the pricing are under forbearance, which means we are not regulating the pricing except the pricing of interconnect, which in any case will have to be regulated the interconnect user charges as they are called.

As of now, we find no reason to sort of intervene or check any of these things that the pricing are predatory or not. We do not see any reason to intervene because the prices are under forbearance.

You don’t see any reason to intervene because prices under forbearance at this point in time, but I want to talk to you then about the interconnect charges at Rs 0.14 currently and I know that the consultation process is on, and I think you had said that you would require counter comment to come in by the October 10 and of course written to comments to come in by September 26, which is today. What is the view that building up as far as interconnect charges are concerned?

We don’t build up any views, you see the way it happens the TRAI process is, that we have an issue and interconnect user charges is an issue and there was a need to revisit those things because of a particular plan by the BSNL, which is called the fixed-mobile telephony and because of that there was a need to review these IUC charges and we have issued a consultation paper and in any consultation paper, we provide the views of both sides.

Typically, on the one hand, there was a view that these should be reduced and ultimately taken to zero level. There is another view that they should continue or even increase and we provide arguments from both sides. Then we formulate that paper and put it for public consultation.

Are you likely to extent the time period of consultation that is the demand by COAI that extended by another two months?

We have extended the time by another 3 weeks, if I remember correctly some operators had taken the position that they are participating in the auctions and otherwise and typically our approach has been in the past also that we provide adequate time to the stakeholders to put forward their views and if there are reasons or sufficient reasons are there we can extend the time, and that is what we have done.

By when do you realistically expects the TRAI to firm up its view as far as the interconnect charges concerned? Typically, every consultation paper approximately takes out about six months to mature, because first the paper is put out, then the views come, then the counter comments come, then we have an open house discussion, and thereafter we formulate whatever the regulatory response which TRAI has to formulate. Typically, it takes about 5-6 months.

Let me also ask you this business of the war that is currently underway between if I could call it broadly the two factions the COAI versus Jio at this point in time and yesterday there is a press release that has been put out by both sides, one which claims that there are 3 incumbent dominant operators that are really skewing the game and the other press release from the COAI, which accuses Jio of being a backdoor operator. As the regulator, do you take hands off approach as a regulator; do you say there is a need now to get people back to the table? Look, I am not an arbitrator. I am not here to sort of sort out the differences between various operators that’s not my job, my job is to ensure that there is a healthy regulatory framework, which is in place and which is sort of obeyed or sort of complied by all the stakeholders that’s my job and that’s what I am doing.

Since you are saying that your job is not arbitration but is regulation, by when will the TRAI come up with a firm view that this quality of service is unacceptable, the call failure rate is unacceptable and hence we now need to move to plan B or plan C whatever the case maybe. By when can we expect further action? The TRAI’s rules of the game are already in place, not now but from long back. The quality of service norms at the point of interconnect, the interconnect user charges, etc.; everything is in place so there is no ambiguity in the rules. It is a question of if the rules are not being followed or complied with, then there is a process as to how that process will take place and that process is also articulated in the regulations, so we will go strictly according to that process.

Do you believe that there is a convenient misinterpretation of the rules at this point in time?

The rights of interpretation will ultimately rest with the regulator in case there are issues in that. We will take actions as per the rules.

Your last meeting with telcos was about a week plus ago and since then we have seen at least if one goes by the claim both sides are making no improvement. Is that your sense as well that there has been no improvement since the last time that you had a meeting with them?

The data which I have got for September 15-19, these are five days of data which we called for, what I find is that the failure rate is certainly unacceptable.

Has it gone up?

You can’t find trend in 5 days, so we have the data of the five days, and that’s what we have analysed, and we will take action on that. We certainly continue to analyse the data on a day to day basis now, because the rates are really very unacceptable, and then the trend will emerge as to whether it is improving or not improving.

What is the message that you would like to send out to telcos today?

Message is very clear that they have to comply with the regulations relating to the point of interconnect, because I see this not as really an issue between the operators as much, but I see this issue because for the customers. Ultimately for us for the TRAI customers are the most important stakeholders and I don’t really distinguish between customers of operator A or operator B. For me every customer has equal right and therefore I would request and urge first and then of course as I said it doesn’t mean that we will not take any appropriate steps, legal steps required, but my hope is that this whole issue of failure of calls on the point of interconnect gets resolved as soon as possible in the interest of the customers.

If it is not resolved and I know you said, you don’t want to hypothecate it, but if it is not resolved. We haven’t seen evidence of that at least at this point in time play out, if it is not resolved what is the next step?

As I said the next step is to essentially get back to the operators and say look these are the figures, which indicate that the level of call failure is much higher than the level which is prescribed for the rules, what is the explanation for that and thereafter once they submit the explanation, then we will take appropriate action that’s the next step.

Let me then talk to you about another event that we are anxiously awaiting and that, of course, is the spectrum auction today, is the date where we have the mock auction taking place. Do you feel that there is complete preparedness at this point in time, of course, we will know at the end of the day if your system is a glitch free and all set to go, but do you have a sense of confidence about how this auction is going to play out?

I have great confidence because that last time also the auction took place without any flaw and I am sure things must have improved. Of course, I am not directly involved in the auction process, so, therefore, I will not be able to make any comment on the preparedness part of it, but I am sure preparation must have been done.

But just on the issue of reserve pricing and if one goes by the numbers that has been deposited in terms of the earnest money and the sort of views that seem to be coming in from people who track the sector closely from industry insiders, from industry experts the feeling is that (a) there is of adequate quantity of spectrum so you are not going to see that kind of irrational bidding that people have seen in the last auction and (b) as far as 700 MHz is concerned, the reserve price is just not something that people have the appetite for?

See speculation is typically done in situation where are events which are going to happen a little longer in future. Here is a situation where you are going to see the play happen in a couple of days, so why do you want me to speculate. I will not to give any views on any of the issues, because I think spectrum auction is going to take place in the next few days, and we will see how it works out.

You said that you are not directly involved because it is a matter that the Department of Telecommunication (DoT) is looking at. The DoT says that it is involved with this business of call failures etc., because that’s the remit of the TRAI, but to be fair has there been a conversation, a dialogue between you and the DoT on what is currently happening, the telecom minister has so far said the government will not intervene in what is going on between incumbent telecom operators and Jio, but has there been any conversation, any dialogue with the DoT on this matter?

The conversation and the dialogue are a natural part of the process between regulators and the licensor this keeps on taking place it doesn’t have to be a formal conversation on every issue.

But informally has the matter been taken up with the government?

Certainly, we keep on discussing informally with the telecom secretary, with the honourable minister of telecom that keeps on happening, but very clearly the quality of service issues and the compliance of the licensing issues are the remit of TRAI and TRAI is doing their job that’s what I can.

You said that it takes about six odd months to go from putting a consultation paper together to establishing a firm view. What’s happen to the previous consultation papers the net neutrality for instance consultation paper, when will we see you move forward?

I am surprised that you are making that statement because essentially net neutrality paper, we issued a pre-consultation paper, that pre-consultation paper we have received, the comments, the counter comments and in the next 15 or 20 days we are going to issue the consultation paper. That is certainly on time. There are other consultation papers also and we basically maintaining a very clear and strict timeline that we don’t kind of delay the process of coming to a conclusion.

So you are saying in 15 days we will see the consultation paper?

Yes, because we now have all the material ready for the consultation paper, and we are now in the process of drafting the consultation paper, and please understand, net neutrality is an extremely important issue. And we do not want to leave out any of the points or elements of that process, and we want that everything should be included, and that is why we went an extra step of issuing a pre-consultation paper which we do very rarely. We had done it, in this case, so we should be able to issue that paper in the next 15 days time.

You say that given the current situation that there is a need for perhaps fast-tracking the IUC consultation process?

The fast tracking or not, that is not the issue. There is a set down process. Please understand that TRAI is one of the few institutions in the country whose processes are completely transparent and completely consultative. Short-circuiting any of these processes will not be doing justice to the subject. So, I am not one of those people who say let us do it yesterday. We will do it in a proper way, consult every stakeholder, get their comments, publish their comments on the web, get the counter comments, have an open house discussion, maybe have more than one open house discussion because this is for example, if there are important issues. And then come out with the result. So, that is the way we go. We do not short-circuit these processes saying that today, we thought about it and tomorrow we will issue an order, that is not the way we operate.

The earliest we could expect some sort of resolution on the IUC front from the TRAI is 2017?

No, it is not a question of resolution or not resolution. It is an issue which has been put out in a consultation paper, and we will certainly be able to come out with the result in due course of time as typically it takes as I said about five to six months from the issuance of the paper to the final conclusion.

Let me move away from auctions and call failures and talk to you about something that perhaps at least there is more positive momentum on and that has to do with this business of financial inclusion linking the Aadhaar card now to mobile payments and so on and so forth. I know that you have been speaking with other regulators, and you have actually spent a fair amount of your time on that. Give us a sense of the milestones that you hope to be able to achieve on that front in the next few months?

As far as our country is concerned, we have really integrated Aadhaar into the entire financial inclusion space. For example, direct benefit transfer using Aadhaar as a financial address is being used in a huge number of cases. In LPG alone, 140 million people’s accounts are being credited every month. So, we are really working at a scale, on scholarships, in social security pensions, etc.

This is a transcript of RS Sharma’s interview to CNBC-TV18’s Shereen Bhan.

Disclaimer: Reliance Jio is owned by Reliance Industries, who also own Network18, the publisher of Firstpost and Tech2