Telecom Regulatory Authority of India

(IS/ISO 9001:2008 Certified Organisation)

Annual Report 2010-11

Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg, (Old Minto Raod ), New Delhi 110002 Telephone : +91-11-23220534 Fax No: +91-11-23213036 E-mail : ap@trai.gov.in Website : http://www.trai.gov.in

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Letter of Transmittal
To the Central Government through Honble Minister of Communications and Information Technology It is my privilege to forward the 14th Annual Report of the Telecom Regulatory Authority of India to be laid before each House of Parliament. The report is for the year 2010-11. Included in this report is the information required to be forwarded to the Central Government under the provisions of the Telecom Regulatory Authority of India Act, 1997, as amended by TRAI (Amendment) Act, 2000. The report contains an overview of the Telecom Sector and a summary of the key initiatives of TRAI on the regulatory issues with specific reference to the functions mandated to it under the Act. The Audited Annual Statement of Accounts of TRAI has also been included in the report.

(DR. J.S. SARMA) CHAIRPERSON Dated: 5th December 2011

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TABLE OF CONTENTS
Sl.No. Particulars Overview Page Nos. 1-8

PART-I
Policies and Programmes 9-38

PART-II
Review of working and operation of the Telecom Regulatory Authority of India

39-88

PART -III
Functions of Telecom Regulatory Authority of India in respect of matters specified in Section 11 of Telecom Regulatory Authority of India Act

89-106

PART-IV
Organizational matters of Telecom Regulatory Authority of India and Financial performance A. B. C. Organizational matters of Telecom Regulatory Authority of India Audited Accounts of TRAI for the year 2010-11 Audited Contributory Provident Fund Accounts of TRAI for the year 2010-11 Annexures List of abbreviations 107-122 123-151

153-173 175-196 197-200

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OVERVIEW
The focus of the Telecom Regulatory Authority of India during the year 2010-11 was to restructure the policies and strategies in the Telecom as well as the Broadcasting sectors so as to lay down a strong foundation for the future development of these sectors and also to empower and educate the growing body of telecom consumers. The work relating to these two sectors during the year was as follows:

A.

Telecom Sector

The Telecom sector continued to register an impressive growth in the year 2010-11. During the year, the number of telephone subscriptions increased from 621.28 million to 846.32 million, registering a growth of 36.22%. While the wireless subscription base increased by 227.27 million, the wireline base recorded a decline of 2.23 million. The wireless segment continued to dominate with a total base of 811.59 million connections. The overall teledensity in the country registered an increase from 52.74 at the end of March 2010 to 70.89 at the end of March 2011. The rural teledensity which as on 31st March 2010 was 24.29 increased to 33.79 at the end of March 2011, as compared to the urban teledensity of 119.77 and 157.32 respectively. However, the growth rate of subscribers in rural areas during the year was higher at 40.64 % compared to 34.11% in urban areas. The capital employed in the sector increased from Rs 2,86,837 crore in 2009-10 to Rs 3,37,683 crore in 2010-11 i.e. an increase of 17.73 % indicating a healthy growth of investment in the sector. The growth in subscriber base resulted in an increase in the gross revenue of telecom services as reported by the service providers for the year which increased from Rs 1,57,985 crore to Rs. 1,71,719 crore during the year, a growth of 8.69%. At the same time, the minutes of usage (MOU) per subscriber per month for GSM and CDMA registered a decline from 410 and 307 at the end of March 2010 to 349 and 263 respectively. The average Revenue Per Minute (RPM) too decreased from Rs 0.57 to Rs 0.51(a fall of 10.5%) for GSM operators and from Rs 0.49 to Rs 0.47 (a fall of 4.1%) for CDMA operators. The Average Revenue Per User per

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month (ARPU) which at the end of March 2010 was Rs 131 in case of GSM operators and Rs 76 for CDMA operators, decreased to Rs. 100/- and Rs.66/- per month for GSM and CDMA operators respectively at the end of the year 2010-11. Resultantly, the Earning Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the telecom sector in 2010-11 was Rs 23,266 crore, as against Rs 29,347 crore in the previous year indicating a fall of 20.72 %. The EBITDA margin declined to 13.95 % in 2010-11 from 19.48 % in 2009-10. In contrast to the rapid growth in voice segment, the growth in the Internet and broadband connections was modest. While Internet subscribers increased from 16.18 million to 19.67 million during the year, the number of Broadband connections increased from 8.77 million to only 11.89 million. The slow growth of Internet and Broadband can be attributed to the fact that the predominant mode of providing Broadband connection was by using digital subscriber line (DSL) technologies over copper pairs, which are limited in number and geographical spread. Following the recommendations of TRAI, Government auctioned spectrum in 2100 MHz and 2300 MHz bands (3G and BWA) in May 2010. The auction not only yielded an amount of Rs 1,06,262.26 crore to the exchequer but more importantly marked a major development in the provision of wireless Broadband in the country. The operators started rolling out 3G networks in the last quarter of the year with the promise of faster roll out in the next year. However, there was no roll out by the operators who successfully bid for the BWA spectrum. the World over, the last few years have seen nature of telecom undergoing

considerable change from provision of only voice communication to increasing provision of data, content and applications. Currently in India, the contribution of non-voice revenue to the total mobile revenue is just about 11% which is significantly lower than in developed markets. The importance of telecommunications as an essential input to the overall economic activity in the country has also increased manifold. TRAI took note of the criticality of Telecommunications to the countrys development and made several significant policy recommendations to the Government. These recommendations covered the domains of spectrum management, licensing, spread of Broadband, Telecom Infrastructure, Green telecommunications and Telecom equipment manufacturing. The recommendations made by the TRAI, in the year 2010-11 (some of them were made in April 2011 but the work was mostly done in 2010-11) formed the core of the draft National Telecom Policy 2011 announced subsequently by the Government. In its recommendations on Spectrum Management and Licensing Framework issued on 11 th May, 2011, the Authority estimated that an additional 500 MHz of spectrum was required to meet the telecom requirements by the year 2015 and indicated that it would undertake to draw up a suitable schedule for its vacation and ensure that spectrum is used efficiently, optimally and economically. It desired that it should be entrusted with the task of carrying out a review of the present usage of spectrum available with the Government agencies. It also recommended for creation of a specific fund for spectrum refarming. The Authority also examined the requirement of spectrum

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for the existing licensees and recommended that no more UAS licence linked with spectrum should be awarded. Its recommendation was that in future all licences should be unified licenses delinked from spectrum. Keeping in view the contractual obligations of the existing licenses, the Authority recommended that spectrum assigned beyond the contracted amount will be paid for at the Current Price pro-rated for the period of the remaining validity of their licence. Based on an estimation by an expert committee, TRAI recommended the Current Price of spectrum upto 6.2MHz and beyond 6.2 MHz, as the best available figure, to be made applicable from 1.4.2010. TRAI recommended that the charging of spectrum beyond 6.2 MHz on the basis of these estimated figures should be subject to the condition that the final prices could be suitably modified by the price determined through auction, if any. In order to avoid arbitrage opportunities because of non-uniformity in the rates of licence fee, the Authority recommended that the Infrastructure providers (IP) and the Internet Service Providers (ISP) be brought under the licensing regime. It also recommended that the License fee, which currently is different for different circles as well as services, be made uniform at 6%. Concerned at the low teledensity in the rural areas, the Authority recommended the revision of the existing roll out obligations to provide for a mandatory and time-bound roll out in the rural areas. Considering the large number of service providers in each service area, and the position relating to availability of spectrum, TRAI was

of the view that measures to consolidate spectrum through Mergers & Acquisitions (M&A) and spectrum sharing should be facilitated and recommended specific measures to achieve this objective. TRAI, while examining the status of compliance of rollout obligations by the post 2006 licensees, found that certain licensees had not complied with the roll out obligations for the first year. Accordingly, TRAI recommended the cancellation of licenses apart from imposition of liquidated damages. TRAIs estimation was that as a result, about 255.2 MHz of GSM spectrum and 27.6 MHz of CDMA spectrum can be released. The significance of an effective Broadband network is being acknowledged in all countries. In order to provide ubiquitous availability of a communications network, capable of providing both voice and data services, the Authority gave its recommendations on National Broadband Plan in December 2010. The Authority recommended the establishment of a fiber optic based, open access, National Broadband Network to connect all Habitations with a population of 500 and above. It also recommended the provision of Fiber-to-theHome (FTTH) in 63 cities covered under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Fiber-to-the-curb (FTTC) in all other cities and towns. The recommendations for optic fiber network in rural areas have since been accepted by the Government. Keeping in view the future growth of telecommunications in the country, the Authority recognized the need for creation of an effective infrastructure requiring significant investment. The Authority accordingly

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recommended a framework for efficient deployment of infrastructure, deployment of towers, sharing of active and passive infrastructure, promoting advanced inbuilding solutions and Distributed Antenna Systems, Right of Way policy, Internet Exchange Points, migration to IPv6, Mobile V irtual Network Operator (MVNO) and framework for rural telecom. India is the second largest and fastest growing mobile market in the world. There are currently about 400,000 telecom towers in the country, involving significant diesel consumption. The total emission of the Indian telecom industry is around 1% of the countrys total carbon emission. TRAIs recommendations on Approach towards Green telecommunications provided that 50% of all rural towers and 20 % of the urban towers should be powered by hybrid power by 2015 and that all service providers should aim at reduction of carbon emission by at least 8% of the base year (2011) emissions by 2015. All equipment, products and services should be energy and performance assessed and certified by 2015. The recommendations also dealt with the collection and disposal of Telecom waste. The enormous growth of the Telecommunications in the country has unfortunately not been accompanied by a corresponding growth of the Telecom equipment manufacturing industry. Resultantly, while only about 12.5% of the demand for telecom equipment is being met by domestic production, the Indian products account for a mere 3% of the demand. The Authority called for a Telecom equipment manufacturing policy, and specified the targets which include meeting 45% of the domestic

demand through domestically manufactured products by the year 2015 and 80% by the year 2020; provide market access to Indian products to the extent of 25% by the year 2015 and 50% by the year 2020; increase value addition in domestic manufactured products to 35% by the year 2015 and 65% by the year 2020. To achieve the proposed targets, TRAI recommended the setting up Telecom Equipment Manufacturing Organisation (TEMO), a Testing and Certification Organisation (TCO), a Telecom Research & Development Fund (TRDF) and a Telecom Research and Development Park; a Telecom Manufacturing Fund (TMF) as well as a Telecom standards Organisation (TSO). Several Financial incentives have also been proposed. To enable the numbering plan to take care of the exponential growth of mobile connections, TRAI proposed an integrated 10digit numbering plan with a view to avoid inconvenience to the customers and allow sufficient numbering resources for the next 3040 years. This integrated numbering will also facilitate extension of number portability to fixed lines. Interim solutions to make available sufficient resources during the intervening period were suggested. Telecommunications technology impacts evolution of regulatory practices. Through Research analysis, TRAI seeks to understand the drivers of change in telecommunications particularly convergence in various forms. Recognising the importance of Next Generation networks (NGN), TRAI initiated a detailed process of preparing for consultation and eventual establishment of appropriate policy and regulatory framework for NGN. TRAI has also started publishing a monthly technology magazine that would

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focus on different aspects of telecommunications technology for dissemination among different stakeholders. Spread of telecommunications in remote and rural areas has provided access to telecom services to hitherto unconnected population, making it possible to integrate them into the mainstream of socio-economic activities. Consumer protection has been a principal concern for TRAI. During the year 2009-10, TRAI issued the Regulations relating to Mobile Number Portability (MNP). The efforts of the Authority bore fruit during this year and MNP was introduced in the country from 20th January, 2011. This proved to be a major boon to the consumers. A major initiative of the Authority in the year 2010-11 was the work relating to control of unsolicited commercial communications, popularly known as pesky calls/SMS. Although TRAI issued The Telecom Commercial Communications Customer Preference Regulations 2010 in December 2010, the same could not be implemented fully during the year for want of allocation of the requisite numbering resource from the DoT. The Regulations were however implemented w.e.f. 27th September 2011 and were well received throughout the country. It is the endeavour to continually evolve the grievance redressal mechanism for further benefit of the consumers, TRAI issued a consultation paper on Review of measures to protect the interest of consumers on 2 nd August 2010. In the context of representations from consumers and their representatives seeking further effective transparency measures, TRAI also issued a Consultation Paper on Certain Issues relating to Telecom Tariffs on 13th October 2010.

In its efforts to promote consumer protection and as well as consumer awareness, the Consumer Advocacy Groups (CAGs) registered with TRAI play an important role. In the year 2010-11, TRAI has taken several measures to strengthen the CAGs. It has attempted to bring about a greater coordination between the CAGs and the Telecom Service Providers (TSPs). The result is that the TSPs now hold regular meetings on predetermined dates with due intimation to CAGs. TRAI has also engaged in greater depth with Consumer Advocacy Groups (CAGs). During this year, Regional workshops were organized in the 5 Regions of the country i.e. North, East, West, South and North East for the CAGs. CAGs were also encouraged to take up more consumer awareness workshops and 72 workshops in different parts of the country for consumer education were organised compared to 6 such workshops organised during the previous year. Starting January, 2011, a monthly Newsletter conveying important activities/initiatives taken by the Authority in the telecom sector has been introduced for circulation to all CAGs. The representation of the CAGs in the committee on utilization of Consumer Education and Protection Fund (CUTCEF) was increased from two to five to give better representation to the CAGs. A sizeable population in our country especially that in rural and remote areas, has no access to basic financial services. The fast growing roll-out of mobile services into these areas can serve to promote financial inclusion. In the framework for delivery of basic financial services using mobile phones, TRAI was entrusted with the responsibility of providing the required regulatory framework governing the quality of service, provisioning and pricing

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of mobile services for delivery of basic financial services and TRAI issued a consultation paper on Quality of requirements for delivery of basic financial services using mobile phones.

television, 53% was on regional channels, growing from 47% in the year 2009. The broadcasting and cable TV services sector primarily comprises of 24 pay broadcasters/ aggregators, an estimated 60,000 cable operators, 6000 Multi System Operators (MSOs), six pay DTH operators, apart from the public service broadcasterDoordarshan. The terrestrial TV network of Doordarshan covers about 92% of population of the country through a network of 1415 terrestrial transmitters. The radio sector consists of 245 private FM radio stations, besides the public service broadcaster- All India Radio (AIR), having a network of 237 broadcasting centres with 149 medium frequency (MW), 54 high frequency (SW) and 177 FM transmitters. The coverage of AIR is 91.85% of the geographical area of the country, serving 99.18% of the population. The coverage of FM radio in the country is around 37% of the geographical area of the country. During the year 2010-11, 30 new licenses, for setting up of community radio stations, were issued thereby taking the number of licensees from 100 to 130. During the same period 53 licensees operationalised their community radio stations, taking this number from 55 to 108. The FM radio market registered a robust growth of over 24% during the year 2010 making it a Rs.1000 cr. industry. The industry also showed a significant improvement in profitability during the year. Profit margins improved by 5-15% for the established players and 25-30% for the smaller players. Local advertising continued to remain a strong contributor to the industry revenues, accounting for around 40% of advertisement revenues.

B.

Broadcasting Sector

The Broadcasting sector consists of Television and Radio Services. India has the worlds third largest TV market after China and USA. During the year 2010-11, the TV households in India have grown from 136 million to 143 million, which amounts to an increase in penetration of TV services from 58% to 61% in the Indian households. During this period, the Cable TV services, which form the largest part of the pay TV universe, has grown from around 88 million to around 92 million subscribers. The Direct to Home services (DTH), has witnessed substantial growth from 21.3 million to 35.56 million registered subscribers. During the same period, total number of registered TV channels grew from 524 to 649 including the pay channels whose number increased from 147 to 155. The market size of Indias TV industry increased from Rs 25,700 cr. in the year 2009 to Rs 29,700 cr. in the year 2010, registering a growth of 15%. The subscription revenue which accounts for the major share of the overall revenue of the TV industry, grew from Rs. 16,900 cr. in the year 2009 to Rs. 19,400 cr. in the year 2010, whereas the ARPUs remained almost flat at around Rs. 160 per month. The advertisement revenue in the TV sector in India was Rs. 10,300 cr. in the year 2010, up from Rs. 8,800 cr. in the year 2009. In 2010, TV advertising recorded a growth of 24%. Of the total advertisement volumes on

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The Authoritys effort during the year 2010-11 related to a comprehensive review of the tariff structure of the Television sector and implementation of digital addressable cable TV systems. The comprehensive tariff exercise covered analog cable TV services, digital cable TV services, DTH services, IPTV services and HITS. Separate consultation papers were issued for each of the above services. This exercise culminated in the finalization of two tariff orders, covering both wholesale and retail tariff for addressable and non-addressable systems. The draft tariff order for the non-addressable systems was submitted as part of report to the Honble Supreme Court on 21st July 2010. The other tariff order, notified on 21st July 2010, caters to all the addressable platforms viz. DTH, HITS, IPTV and Digital Addressable Cable TV systems. A significant feature of this tariff order is regarding the mandatory provision of channels on a-la-carte basis to the consumers. Analog cable TV services suffer from capacity constraints and are non-addressable in nature. Digitisation of cable TV services will solve the problem of capacity constraint and will enhance the range of choice to the customer both in terms of variety of content and services such as broadband. Addressability would enable the consumer to watch the channels of choice as well as bring in transparency in business transactions. For transforming the cable TV sector from analog to digital, the Authority on 5 th Aug 2010, recommended to the Government, implementation of digitisation with addressability in the entire cable TV sector in a phased manner by December 2013. These recommendations also included measures such as grant of Right of Way (RoW)

permission for laying cables, fiscal incentives in the form of tax holidays, reduction in custom duty on headend equipment and STBs and the rationalisation of taxes/levies. In order to facilitate the cable TV operators to mobilise the resources for this transformation, the Authority has also recommended to the Government on 30th June 2010, an upward revision in the FDI limits for the national and state level MSOs, undertaking digitisation with addressability. The recommendations relating to digitisation have since been accepted and the Government have made necessary amendments to the Cable Act, 1995 and notified complete addressable digitisation by December 2014. The criteria for grant of permissions for TV channels was also reviewed by the Authority during the year and recommendations given to the Government for the revision of the uplinking / downlinking guidelines covering net worth and other eligibility criteria for the applicant companies, revision of permission fee, duration of permission period and transferability of permissions etc. It was also recommended that India should be developed as a teleport hub.

International Relations
TRAI enjoys pride of place as one of the successful regulators in the world. The year has seen a spurt of activities in the international Relations. A Memorandum of Understanding (MoU) was signed with Agncia Nacional de Telecomunicaes - ANATEL, the Telecommunications Regulator of Brazil, to formalize the institutional and technical cooperation in the field of international

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cooperation. Earlier MoUs exist with National Telecom Regulatory Authority (NTRA) Egypt, Hellenic Telecommunications & Post Commission (EETT) Greece, Ministry of Internal Affairs and Communication (MIC) Japan and The Stanford Program on Regions of Innovation and Entrepreneurship (SPRIE), Stanford University, California. There have been regular interactions and meetings with them on topics of mutual interests on various occasions. The Authority also had meetings with Federal Communications Commission (FCC) USA, US Department of State and MIC Japan. There has been an increase in the number of delegations visiting TRAI for meetings, discussion, exchange of information and study visits. Visitors to TRAI included delegations from MIC Japan, U.S. - India Business Council (USIBC), Ministry of Communication and Information Indonesia, Telecommunication Regulatory Authority (TRA) UAE, MTN South Africa, Zambia Information and Communications Technology Authority (ZICTA), Ethiopian Telecommunication Agency (ETA) Ethiopia, Tanzania Communications Regulatory Authority (TCRA) Tanzania. Officers from TRAI were sought and deputed as Experts and Speakers in International Forums/ Seminars/ workshops organized by International Telecommunications Union (ITU) and Asia

Pacific Telecommunity (APT). TRAI officers were also nominated as experts for providing assistance to other countries to help them in formulate their regulations and policies in the field of telecommunication. TRAI was actively represented in major international events like ITUs Global Symposium for Regulators (GSR), ITU Telecom World, World Telecommunication Development Conference (WTDC), Mobile World Congress, South Asian Telecommunication Regulator s Council (SATRC) Meeting.

Audit and Quality Management

Telecom Regulatory Authority of India Act, 1997, provides that the Accounts of the Authority shall be audited by the Comptroller and Auditor General of India (C&AG). Accordingly, the Annual Accounts of the Authority for the year 2010-11 were audited and certified by the C&AG. As in the year 200910, in 2010-11 also, the C&AG has not made any adverse observations on the Accounts of TRAI. Telecom Regulatory Authority of India was awarded ISO 9001:2000 certificate in December 2004 by the Bureau of Indian Standards (BIS). After evaluating the implementation and effectiveness of the Quality Management System (QMS), BIS has awarded in November 2010 the present series of ISO Standards viz., IS/ISO 9001:2008 certification to TRAI, which is valid upto November, 2013.

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PART-I POLICIES AND PROGRAMMES

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TELECOM SECTOR
1. The growth pattern of previous years continued this year too. There was phenomenal growth in the subscriber base in the telecom sector. At the end of the financial year, the subscriber base was 846.32 million, with mobile subscribers on their own surpassing the 800 million mark. The status of development of the various services of the telecom sector is outlined below.

WIRELESS 2. The wireless subscriber base was 811.59 million as on 31st March 2011 compared to 584.32 million as on 31st March 2010. It added 227.27 million subscribers in the financial year 2010-11 registering an annual growth rate of about 38.89%. The total subscriber base of wireless services has grown from 98.77 million in March, 2006 to 811.59 million in March, 2011 as depicted in Figure 1 below: Figure 1 : Wireless Subscriber (in million)

WIRELINE 3. The subscriber base of wireline subscribers as on 31 st March 2011 was 34.73 million as compared to 36.96 million subscribers on 31st March,

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2010, registering a decrease of 2.23 million subscribers during the year 2010-11. Out of the 34.73 million wireline subscribers, 26.04 million are urban wireline subscribers and the remaining 8.69 million are rural subscribers. The status of the wireline subscribers during the last six years is depicted in Figure 2 below: Figure 2 : Wirelline Subscriber (in million)

INTERNET SUBSCRIBERS 5. The Internet subscriber base in the country as on 31st March 2011 stood at 19.67 million as compared to 16.18 million as on 31 st March 2010, registering an annual growth rate of about 21.56%. The total broadband subscriber base has reached 11.89 million as on 31 st March, 2011 as compared to 8.77 million as on 31 st March 2010 thereby registering a net addition of 3.12 million broadband subscribers during the financial year 2010-11 with growth rate of 35.57%. The Internet subscriber base consisting of narrowband (<256 kbps) and broadband (>256 kbps) for the last six years is depicted in Figure 4 in the next page.

6.

TELEDENSITY 4. The tele-density at the end of March, 2011 reached the mark of 70.89 as compared to 52.74 at the end of previous year, recording an increase of nearly 18.15. The trend of growth of teledensity since March 2006 is depicted in Figure 3 below: Figure 3 : Growth of Teledensity

TRENDS IN TELECOM TARIFFS 7. Telecom Regulatory Authority of India, through appropriate regulatory policies and measures, has succeeded in facilitating competition and thereby achieving affordable tariffs with sustained growth. This has succeeded in providing the financial sustainability of the operators, promoting efficiency in the sector and meeting the social objectives. The results are evident from the phenomenal growth in subscriber base and the decline in tariffs, which has benefited the consumers. The Authority has followed a light touch approach towards regulating telecommunication tariff. Recent years have witnessed sharp decline in telecom tariff in India, particularly in the Mobile, National Long Distance and International Long

8.

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Figure 4 : Internet Subscribers (in million)

Distance segments, which started with the notification of Telecommunication Tariff Order in 1999 by the Regulator and has continued thereafter. For example, a local mobile call which used to cost Rs15/- per minute, now costs 60 paise per minute. There is no charge for incoming calls. Similarly, domestic long distance calls which used to cost more than Rs.37/- per minute in the pre 1999 period, are now available virtually at the cost of local calls. In the case of international long distance calls, for example, a call to American continent from India has come down from Rs 75/- to less than Rs 7 per minute. 9. There are a large number of product and service options available to consumers depending upon their usage and need profile. One unique option is the availability of a set of tariffs generally referred to as Life Time Plans which

enable consumers to enjoy the same tariffs without any adverse rate changes for the entire license period of the service provider. 10. After an initial phase of intense competition arising out of entry of the new players in GSM mobile segment in the recent past, this year witnessed consolidation in tariff trends. The implementation of Mobile Number Portability (MNP), however, encouraged the telecom service providers to introduce innovative tariff offers to attract subscribers from other telecom service providers while retaining their own. The per-second pulse tariff schemes introduced in 2009-10 by the mobile service providers became a regular feature of tariff offers this year. Almost all service providers have on offer at least one per-second tariff option in both the post-paid and prepaid

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segments. Some service providers have even offered per-second plans with lifetime validity. The subscribers thus continued to enjoy low tariffs in the form of a variety of discounted offers in all service segments across all service areas and service providers. 11. The percentage of reduction in tariff for Long Distance Services and International

Long Distance Services can be seen in Figure 5 and Figure 6 respectively. THE INDIAN TELECOM PERFORMANCE INDICATORS 12. SERVICES

TRAI publishes a quarterly report on The Indian Telecom Services performance Indicators. This Report presents the key parameters and

Figure 5 : National Long Distance service - Percentage decline in tariffs* during the period prior 1/5/99 to 31/3/11

Figure 6 : National Long Distance service - Percentage decline in tariffs* during the period prior 1/5/99 to 31/3/11

* The percentage decline in tariffs shown above takes into account the STD / ILD rates of BSNLs in General Plan.

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growth trends for Telecom & Broadcasting Services and QoS related parameters. This report provides a broad perspective on the Telecom Services to serve as a reference document for various stakeholders,

research agencies and analysts. For the Year 2010-11, TRAI has come out with 4 Quarters reports. Snapshot covering the key parameters for the 4 quarters is as under (Table 1):

Table 1: Performance Indicator Quarter Quarter Quarter ending ending ending June 2010 Sept. 2010 Dec. 2010 Telecom Subscribers (Wireless + Wireline) in Millions Total Telephone Subscribers Urban Subscribers Rural Subscribers Wireless Subscribers Wireline Subscribers Teledensity Total Teledensity Urban Teledensity Rural Teledensity Internet & Broadband Subscribers (in Million) Total Internet Subscribers Broadband Subscribers Telecom Financial Data (Rs. Crores) Gross Revenue during the quarter Adjusted Gross Revenue (AGR) Broadcasting & Cable Services Total Number of Registered Channels with I&B Ministry Number of Pay Channels DTH Subscribers registered with private Service Providers (in Millions) Number of Set Top Boxes in CAS areas Number of Private FM Radio Stations 515 150 23.77 7,70,519 248 526 154 26.44 7,75,876 248 604 155 32.05 7,86,422 245 652 155 35.56 8,04,837 245 41,392.75 30,481.93 41,895.95 29,736.20 42,916.81 29,925.37 45,513.05 31,470.63 16.72 9.47 17.90 10.31 18.69 10.99 19.67 11.89 56.65 128.20 26.43 60.99 137.25 28.42 66.16 147.88 31.18 70.89 157.32 33.79 671.69 452.59 219.09 635.51 36.18 723.28 487.07 236.21 687.71 35.57 787.28 527.50 259.78 752.19 35.09 846.32 564.08 282.23 811.59 34.73 Quarter ending Mar. 2011

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FINANCIAL PERFORMANCE OF THE TELECOM SECTOR#

REVENUE 13. The Total Revenue of the Telecom Service Sector went up from Rs.157,985 cr.in 2009-10 to Rs. 171,719 cr. in 201011 indicating a growth of 8.69%. The corresponding figures of Revenue after adjustment of intra operator interconnection charges, come to Rs.150,660 cr in 2009-10 and Rs. 166,752 cr in 2010-11, showing a growth of 10.68% over the previous year. The revenue contribution from the public sector telecom companies in the 2010-11 was 20.37% (previous year 24.82%) and from private sector companies was 79.63% (previous year 75.18%). Table 2 below indicates the revenue contributions of the public and private sectors during 2009-10 and

2010-11. Figure 7 below indicates the revenue earnings of different telecom companies for 2009-10 and 2010-11. Table 2: Revenue contributions of public and private sector 2009-10 and 2010-11 Revenue of Telecom Service Sector (Rs. in Crores) Particulars Revenue of public sector companies Revenue of private sector Companies Total Revenue 2009-10 37390 113270 150660 2010-11 33976 132776 166752

14.

EBITDA 15. EBITDA represents the Earnings before Interest, Tax and Depreciation & Amortization. The EBITDA for the telecom sector for 2010-11 was Rs.23266 cr against Rs.29347 cr in 200910 i.e. a decline of 20.72%.

Figure 7: Revenues of telecom service providers 2009-10 and 2010-11

Based on the data furnished by Service Providers to TRAI

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16.

The decline in EBITDA for public sector telecom service providers in 2010-11 was 52.39% as against a decline of 12.81% for private telecom service providers. Table 3 indicates the EBITDA of public and private sector companies in 2009-10 and 2010-11.

17.

The EBITDA Margin of telecom service sector declined to 13.95% in 2010-11 from 19.48% in 2009-10. Figure 8 indicates the EBITDA Margin of the entire sector as well as the public and public sector for 2009-10 and 2010-11.

Table 3: EBITDA of public and private sector in 2009-10 and 2010-11 EBITDA EBITDA of public sector companies EBITDA of private sector companies Total EBITDA (Rs. in Crores) 2009-10 2010-11 5868 2794 23479 29347 20472 23266

OPERATING RATIO 18. The Operating Ratio is Operating Expenditure divided by the Total Revenue. The Operating Ratio for 201011 for the telecom service industry was 86.05%. Figure 9 below indicates the Operating Ratio for the entire sector as well as the public and private sectors for 2009-10 and 2010-11.

Figure 8: EBITDA Margins 2009-10 and 2010-11.

Figure 9: Operating Ratios 2009-10 and 2010-11

Annual Report 2010-11 17

CAPITAL EMPLOYED 19. The Capital Employed represents the funds deployed to operate the business. Capital employed in the telecom service sector increased from Rs.286,837 cr in 2009-10 to Rs.337,683 cr in 2010-11 i.e. by 17.73%. Capital employed of public sector companies decreased by 7.35% in 201011 whereas capital employed of private telecom sector companies increased by 30.36%. Table 4 indicates the capital employed in the public and private sectors in 2009-10 and 2010-11.

CAPITAL INVESTMENT (GROSS BLOCK) 21. The capital investment (Gross Block) of the telecom services sector reached Rs. 479278 cr in 2010-11 from Rs.416429 cr in 2009-10 i.e. an increase of 15.09%. Table 5 indicates the Gross Block in the public and private sectors in 2009-10 and 2010-11. Figure 10 shows the Gross Block of telecom service providers for the years 2009-10 and 2010-11.

20.

Table 5: Investment (Gross Block Fixed Assets) public and private sector 2009-10 and 2010-11 (Rs in Crores) Particulars Gross Block of public sector companies Gross Block of private sector companies Total Gross Block 2009-10 189615 2010-11 197332

Table 4: Capital employed in public and private sectors 2009-10 and 2010-11 Capital Employed Capital Employed of public sector companies Capital Employed of private sector companies Total Capital Employed (Rs. in cr) 2009-10 96103 2010-11 89040

226814

281946

416429

479278

190734

248643

CAPITAL EMPLOYED TURNOVER RATIO 22. Capital Employed Turnover Ratio is computed as Income from Telecom Services divided by Capital Employed.

286837

337683

Figure 10: Gross Block (Fixed Assets) of telecom service providers 2009-10 and 2010-11

18 Annual Report 2010-11

Figure 11 below indicates the Capital Employed Turnover Ratio for the entire sector as well as the public and private sectors for 2009-10 and 2010-11. Figure 11: Capital Employed Turnover Ratio

where debt is total debt and equity is shareholders capital plus reserves and surpluses. Figure 13: Debt Equity Ratio 2009-10 and 2010-11.

25. 2009-10 and 2010-11 FIXED ASSETS (NET) TURNOVER RATIO 23. Assets (Net) Turnover Ratio is computed as Income from Telecom Services divided by Net Fixed Assets. Figure 12 below indicates the Assets (Net) Turnover Ratio for the entire sector as well as the public and private sectors for 2009-10 and 2010-11. (i)

The main guiding policy for the telecom sector is the New Telecom Policy (NTP) 1999. The objectives of the policy are as follows:Make available affordable and effective communications for all citizens. This is at the core of the vision and goal of the telecom policy, as access to telecommunications is of utmost importance for achievement of the countrys social and economic goals, Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the countrys economy, Encourage development of telecommunication facilities in remote, hilly and tribal areas of the country, Create a modern and efficient telecommunications infrastructure taking into account the convergence of IT, media, telecom and consumer electronics and assist emergence of India as an IT superpower,

Figure 12: Assets (Net) Turnover Ratio 2009-10 and 2010-11.

(ii)

(iii)

DEBT EQUITY RATIO 24. Figure 13 below indicates the Debt Equity Ratio for the entire sector as well as the public and private sectors for 2009-10 and 2010-11. Debt Equity ratio is calculated as debt divided by equity

(iv)

Annual Report 2010-11 19

(v)

Convert PCOs, wherever justified, into Public Tele-info Centres having multimedia capability like ISDN services, remote database access, and assist emergence of community information systems etc., Transform the telecommunications sector in a time bound manner to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players, Strengthen research and development efforts in the country and provide an impetus to build world-class manufacturing capabilities,

(iv)

Achieve telecom coverage of all villages in the country and provide reliable media to all exchanges by the year 2002, Provide Internet access to all district headquarters by the year 2000, Provide high speed data and multimedia capability using technologies including ISDN to all towns with a population greater than 2 lakhs by the year 2002. The status of main segments of the National Telecom Policy, 1999 is as follows.

(v) (vi)

(vi)

27.

(vii)

RURAL TELEPHONE NETWORK (i) 28. WIRELESS As on 31st March 2011, the Wireless rural [Mobile and WLL (F)] market has reached the 273.54 million mark as against 190.88 million as on 31st March 2010. As per the Performance Indicator Report, 33.70% of total wireless subscribers are now in rural areas. The rural subscriber base is steadily increasing. The rural wireless subscriber base since March 2007 is indicated in Figure 14. The service provider-wise rural wireless subscriber base & their market shares are shown in Table 6 and Figure 15. Figure 14 : Rural Wireless Subscriber (in million)

(viii) Achieve efficiency and transparency in spectrum management, (ix) (x) 26. (i) Protect defence and security interests of the country, Enable Indian telecom companies to become truly global players. The specific targets mentioned in the NTP 1999 are: Make telephone available on demand by the year 2002 and sustain the position thereafter so as to achieve a tele-density of 7 by the year 2005 and 15 by the year 2010, Encourage development of telecom in rural areas making it more affordable by modifying the tariff structure suitably and making rural communication obligatory for all fixed service providers, Increase rural tele-density from the current level of 0.4 to 4 by the year 2010 and provide reliable transmission media in all rural areas,

(ii)

(iii)

20 Annual Report 2010-11

Table 6 : Service Provider-wise Rural Wireless Subscribers and Market Share Sl. No. Wireless Group Total wireless subscribers (in millions) March-11 March-10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Bharti Reliance Vodafone BSNL Idea/Spice Tata Aircel Unitech Sistema Videocon MTNL Loop S Tel HFCL Etisalat Total 162.20 135.72 134.57 91.83 89.50 89.14 54.84 22.79 10.06 7.11 5.47 3.09 2.82 1.47 0.97 811.59 127.62 102.42 100.86 69.45 63.82 65.94 36.86 4.26 3.78 0.03 5.09 2.84 1.01 0.33 0.00 584.32 Rural Subscribers (in millions) Mar-11 65.73 29.47 51.62 32.77 46.05 18.46 19.43 6.86 2.35 0.00 0.00 0.00 0.80 0.001 0.00 273.54 Mar-10 48.09 21.25 36.79 25.26 29.82 13.45 14.00 1.40 0.54 0.00 0.00 0.00 0.27 0.001 0.00 190.88 Market Share of Rural Subscribers Mar-11 24.03 10.77 18.87 11.98 16.83 6.75 7.10 2.51 0.86 0.00 0.00 0.00 0.29 0.00 0.00 100.00 Mar-10 25.20 11.13 19.28 13.23 15.62 7.05 7.34 0.73 0.28 0.00 0.00 0.00 0.14 0.00 0.00 100.00

Figure 15 : Market Share of service providers of Rural wireless Subscriber base

Note: Others include Unitech, Sistema, S Tel and HFCL

Annual Report 2010-11 21

(ii) 29.

WIRELINE The rural wireline subscriber base is decreasing (Figure 16). As on 31st March 2011, the rural wireline subscriber base stood at 8.69 million as compared to 9.80 million at the end of 31st March 2010. As per the Performance Indicator Report, 25.03% of total wireline subscribers are in rural areas. The service provider-wise wireline rural subscriber base & their market share are shown in Table 7 and Figure 17.

EXPANSION OF TELEPHONE NETWORK (i) 30. WIRELESS SERVICES The wireless subscriber base was 811.59 million as on 31 st March 2011 in comparison to the subscriber base of 584.32 million as on 31st March, 2010. It added 227.27 million subscribers in the financial year 2010-11 registering an annual growth rate of about 38.89%. The total subscriber base of wireless services has grown from 90.14 million

Table 7: Service Provider-wise Rural Wireline Subscribers and Market Share Sl. No. Wireline Group Total Wireline Subscribers (in million) Rural Wireline Subscribers (in million) Market Share of Wireline Rural Subscribers (in %)

March 10 March 11 March 10 March 11 March 10 March 11 1 2 3 4 5 6 7 BSNL MTNL Bharti HFCL Sistema TATA Reliance Total 27.83 3.50 3.07 0.17 0.05 1.16 1.18 36.96 25.22 3.46 3.30 0.19 0.04 1.28 1.23 34.73 9.76 0.00 0.00 0.00 0.007 0.03 0.001 9.80 8.64 0.005 0.04 0.002 8.69 99.61 0 0 0 0.07 0.31 0.01 100.00 99.44 0.06 0.48 0.02 100.00

Figure 16 : Rural Wireline Subscribers (in million)

Figure 17 : Market share of service providers of Rural Wireline Subscriber base

22 Annual Report 2010-11

in March, 2006 to 811.59 million in March 2011. Out of 811.59 million subscribers at the end of the financial year 2010-11, 698.37 million (86.05%) were GSM Subscribers and 113.22 million (13.95%) were CDMA Subscribers. The subscriber growth of wireless services of both GSM and CDMA networks from March 2006 to March 2011 is depicted in Figure 18. 31. The subscriber base of individual wireless service providers (both GSM & CDMA) from March 2006 to March 2011 along with their percentage growth over the financial year 2010-11 is given in Annexure I at the end of this Report. The market share of different mobile operators as on 31 st March 2011 is displayed in Figure 19. The list of licensed service providers in various service areas is given in Annexure II at the end of this Report.

Figure 19: Market Share of Wireless Service Providers (as on 31St March 2011)

32.

In the wireless segment subscriber base of GSM reached the 698.37 million subscriber mark at the end of March 2011, as compared to 478.68 million as at the end of March 2010. It added around 219.69 million subscribers during the year, registering an annual growth of 45.89%. In terms of subscriber base and market share of GSM services, M/s Bharti with 162.20 million subscriber base remains the largest followed by M/s Vodafone, M/s Idea/Spice, and M/s BSNL with

33.

Figure 18: Subscriber base of wireless Operators (in million) as on 31st March 2011

Annual Report 2010-11 23

subscriber base of 134.57 million, 89.50 million and 86.27 million respectively. The market share of various GSM operators as on 31 st March 2011 is displayed in Figure 20. Figure 20: Market Share (%) of GSM Operators (as on 31St March 2011)

Sistema with subscriber base of 42.42 million, and 10.06 million respectively. The market share of different CDMA operators as on 31 st March 2011 is shown in Figure 21. Figure 21: Market Share (%) of CDMA Operators (as on 31St March 2011)

34.

In Cellular CDMA Services, in terms of subscriber base and market share, M/s Reliance with 54.65 million subscriber base remains the largest CDMA operator followed by M/s Tata and M/s

35.

The subscriber base for Cellular Wireless services in different categories of service areas for the period March, 2006 to March, 2011 is indicated graphically in Figure 22.

Figure 22: Subscriber Base for Wireless Services in Metros and Circles from March, 2006 to March, 2011 (Figures in Million)

24 Annual Report 2010-11

36.

The addition of Wireless subscribers and annual growth rates for different categories of service areas during the financial years, 2008-09, 2009-10 and 2010-11 is indicated in the AnnexureIII at the end of this report. The total subscriber base for wireless services has registered an annual growth of 38.89% with the maximum growth of 42.21% observed in B Circle during 2010-11. WIRELINE SERVICES As on 31 st March 2011, the total subscriber base of fixed (wireline) lines stood at 34.73 as against 36.96 million on 31st March 2010. The operator wise status of wireline subscribers is shown below in Table 8. The incumbents BSNL and MTNL have 72.63% and 9.97% market share respectively in the subscriber base, while all the five private operators together have 17.40% share. The share of private operators has increased from 15.23% as on 31st

March 2010 to 17.40% as on 31st March 2011. The market share of total fixed lines is shown in the Figure 23 below:Figure 23: Market Share of Wireline Service Providers as on 31st March 2011

(ii) 37.

Note: Others include Quadrant Televentures Ltd. (formerly HFCL) and Sistema Shyam Teleservices Ltd.

38.

As on 31st March 2011 the total urban wireline subscribers were 26.04 million and rural wireline subscribers were 8.69 million. Table 9 indicates the Service Provider-wise Subscriber base in Rural and Urban areas and the same are depicted graphically in Figure 24 and Figure 25 in the next page.

Table 8: Operator wise details of Fixed (Wireline) Subscriber Base as on 31st March, 2011 Sl. No. 1. 2. 3. Service Provider (Wireline) Bharat Sanchar Nigam Ltd. (BSNL) Mahanagar Telephone Nigam Ltd. (MTNL) Bharti Airtel Ltd. & Bharti Hexacom Ltd. Area of Operation All India except Delhi & Mumbai Delhi & Mumbai Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Punjab, Rajasthan, Tamilnadu (included Chennai), UP(East), UP(West). Punjab Subscriber base (Wireline) 2,52,24,905 34,63,969 32,95,919

4.

Quadrant Televentures Ltd. (formerly HFCL)

1,89,900

Annual Report 2010-11 25

Sl. No. 5. 6.

Service Provider (Wireline) Sistema Shyam Teleservices Ltd. Tata Teleservices Ltd. & Tata Teleservices (Maharashtra) Ltd.

Area of Operation Rajasthan Andhra Pradesh, Assam, Bihar, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Maharashtra & Mumbai, Karnataka, Kerala, Kolkata, Madhya Pradesh, North East, Orissa, Punjab, Rajasthan, Tamilnadu (including Chennai), UP(East), UP(West) and West Bengal Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamilnadu, UP(East), UP(West) and West Bengal

Subscriber base (Wireline) 38,440 12,82,437

7.

Reliance Communications Ltd.

12,34,191

Grand Total

3,47,29,761

Source: Monthly Report on Fixed (Wireline) Subscriber base furnished by the Service Providers.

Table 9: Service Provider wise Subscribers (Rural & Urban) Service Provider Subscriber Base (million) Rural BSNL MTNL Bharti Tata Reliance Quadrant (HFCL) Sistema Total 8.64 0.04 0.002 0.005 8.69 Urban 16.58 3.46 3.30 1.24 1.23 0.19 0.03 26.04 Total 25.22 3.46 3.30 1.28 1.23 0.19 0.04 34.73

Figure 24: Market Share of Urban Wireline Subscribers as on 31st March 2011

Figure 25: Market share of Rural Wireline Subscribers as on 31st March 2011 39. As on 31st March 2011 besides BSNL and MTNL 5 Unified Access Service Licencee (UASL) are providing fixed line services. The total equipped capacity and service provider wise connections are shown in Table 10 below:

26 Annual Report 2010-11

39.

As on 31st March 2011 besides BSNL and MTNL 5 Unified Access Service Licencee (UASL) are providing fixed line services.

The total equipped capacity and service provider wise connections are shown in Table 10 below :

Table 10: Service Provider wise Equipped switching capacity Sl. Name of the No. Service Provider 1. 2. Bharat Sanchar Nigam Ltd. Mahanagar Telephone Nigam Ltd. Service Area All India except Delhi & Mumbai Delhi and Mumbai Equipped Capacity 4,44,81,342 53,76,074 Working Connections 2,52,24,905 34,63,969

3.

Bharti Airtel Ltd. & Andhra Pradesh, Delhi, Gujarat, Bharti Hexacom Ltd. Haryana, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu including Chennai, UP(E) and UP(W) including Uttaranchal. HFCL Infotel Ltd. Reliance Communications Ltd. Punjab Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamil Nadu, UP(E), UP (W) and West Bengal. Rajasthan Andhra Pradesh, Assam, Bihar, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, North East, Orissa, Punjab, Rajasthan, Tamil Nadu including Chennai, UP(E), UP(W) including Uttaranchal and West Bengal.

1,02,80,000

32,95,919

4. 5.

3,28,835 25,96,000

1,89,900 12,34,191

6. 7.

Sistema Shyam Teleservices Ltd. Tata Teleservices Ltd. & Tata Teleservices (Maharashtra) Ltd.

64,000 23,30,606

38,440 12,82,437

Source: from reports submitted by service providers

Annual Report 2010-11 27

Public Call Offices (PCOs) 40. As on 31st March 2011, the total number of Public Call Offices (PCOs) was 3.33 million as against 4.59 million as on 31st March 2011. The number of PCOs provided by BSNL, MTNL and Private Operators is indicated in Table 11 below:

(iii) 42.

INTERNET / BROADBAND SERVICES As per the data available on Department of Telecom (DoT) website there were 378 licenses for Internet services as on 31.7.2010. As per the reports submitted to TRAI by various ISPs, as on 31st March 2011 the Internet subscriber base (both narrowband & Broadband) in the country stood at 19.67 million as compared to 16.18 million on 31 st March 2010, registering an annual growth of 21.57%. In addition there were 381.40 million subscribers (as on 31.03.2011) who access data services including Internet using their mobile phones (GSM/CDMA) or data card.

Table 11: Public Call Offices in the Country S. No. 1 2 3 Name of Service providers BSNL MTNL Private Operators Total 2009-10 (March 2010) 1,95,430 2010-11 (March 2011) 1,75,557

16,72,178 13,94,578

27,27,093 17,63,379 45,94,701 33,33,514 43.

The distribution of Internet subscribers among PSU owned ISPs & Private ISPs as on 31st March 2011 is shown below. Share of PSU / Private ISPs as on 31st March 2011.

Village Public Telephones (VPTs) 41. As on 31st March 2011, the total number of village public telephones (VPTs) provided by the service providers, who are also providing fixed line services was 5.84 lakh as against 5.76 lakh as on 31st March 2010. Table 12 provides the total number of VPTs provided by the service providers, who are also providing Fixed Line Services.

Public Sector ISPs Private Sector ISPs Total 44.

1,37,39,840 59,35,143 1,96,74,983

The market share of top five Internet Service Providers (ISPs) in terms of subscriber base as on 31st March 2011 is indicated in Table 13 in the next page.

Table 12: Village Public Telephones in India Sl. No. 1 2 3 Name of Service providers BSNL MTNL Private Operators Total 2009-10 (March 2010) 5,65,276 10,914 5,76,190 2010-11 (March 2011) 5,73,863 10,869 5,84,732 45.

Among PSU owned ISPs, Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Limited have reported subscriber base of 11.32 million and 2.42 million respectively, while among private sector, Reliance Communications Infrastructure Ltd, Bharti Airtel Ltd,

28 Annual Report 2010-11

Table 13: Market Share of Top Five Internet Service Providers (ISPs) in terms of subscriber base as on 31st March 2011. S.No. 1. 2. 3. 4. 5. 6. ISP Bharat Sanchar Nigam Limited Mahanagar Telephone Nigam Limited Reliance Communications Infrastructure Ltd. Bharti Airtel Ltd Hathway Cable & Datacom Pvt. Ltd Others Market Share in % 57.52 12.31 11.05 7.29 1.77 10.06

Hathway Cable and Datacom Pvt. Ltd. have reported subscriber base of 2.17 million, 1.43million and 0.35 million respectively. Other ISPs have subscriber base of 1.99 million. 46. As per Broadband Policy 2004, Broadband is defined as an always on data connection that is able to support interactive services including Internet access and has the capability of the minimum download speed of 256 Kbps to an individual subscriber from the Point of Presence (POP) of the service provider intending to provide Broadband service where such individual Broadband connections are aggregated and the subscriber is able to access these interactive services including the Internet through this POP. There are various technologies available to provide Broadband services. The Digital Subscribers Line (DSL) is the most preferred technology by the service providers to offer Broadband services 47.

in the country. Other technologies used for providing Broadband services are Cable modem, Ethernet LAN, Fibre, Wireless, Leased line etc. The broadband subscriber base in the country at the end of March 2011 is 11.89 Million. INTERNET TELEPHONY As per the new guidelines for grant of license for operating internet services issued by DoT in August 2007, all ISPs were permitted to provide internet telephony and separate category of Internet Telephony Service Providers (ITSPs) has been done away with. As per the report submitted to TRAI, 31 ISPs are providing Internet Telephony Services presently. The list of ISPs providing internet telephony is given in Table 14 in the next page. Total minutes of usage of Internet Telephony during the financial year were 604.15 million minutes.

Annual Report 2010-11 29

Table 14: List of Internet Service Providers providing Internet Telephony Services S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Name of the Service Provider Apna Telelink Ltd. Asianet Satellite Communications Ltd. Blazenet Ltd. Broadband Pacenet (I) Pvt. Ltd City Online Services Ltd Cordia LT Communications Pvt. Ltd Data Infosys Ltd. delDSL Internet Pvt. Ltd Digital2Virtual ISP Pvt. Ltd. Fast Lynx Internet Service Pvt. Ltd Karuturi Telecom Private Limited Mahanagar Telephone Nigam Ltd. Manipal Ecommerce Ltd. My Own Infotech Pvt. Ltd Narmada Cyberzone Pvt. Ltd Nettlinx Ltd. Opto Network Pvt. Ltd. Phonic Net Pvt. Ltd Pulse Telesystems Pvt. Ltd. Sify Technologies Ltd. Swastik Netvision Telecom Pvt. Ltd Swiftmail Communications Ltd. Tata Communications Internet Services Limited Tata Communications Limited Tata Teleservices (Maharashtra) Ltd. (Hughes Telecom) Trak Online Net India Pvt. Ltd Trikon Electronics Pvt. Ltd. Tulip Telecom Limited VIVA Communications Pvt. Ltd World Phone Internet Services Pvt. Ltd You Broadband & Cable India Private Limited

30 Annual Report 2010-11

BROADCASTING AND CABLE TV SECTOR

BROADCASTING AND CABLE TV SECTOR
48. The broadcasting and cable TV services sector has shown a consistent growth over the years spanning last two decades. The sector comprises of analogue and digital cable TV services, DTH services, IPTV services, Radio services and terrestrial TV services. The major component of the sector i.e. pay television services sector, which emerged in the early 1990s, has experienced a rapid growth, with the number of subscribers increasing from just 410,000 in 1992 to around 128 million by March 2011, an average growth rate of more than 35% every year for the last 19 years. The FM radio services and the terrestrial TV services have also been growing consistently. Commensurate to the growth in the subscriber base, the service providers have also grown. The status of development of various services in the broadcasting sector is outlined below.

DTH SERVICES 49. Since its inception in the year 2003 in India, DTH services have had phenomenal growth, adding new subscribers at a rate of around 1 million per month, attaining a subscriber base of around 35 million subscribers of pay DTH services, catered to by 6 pay DTH operators by March 2011. This is besides the viewership serviced by the free DTH services of Doordarshan. The growth of the sector in terms of its subscriber base has been depicted in Figure 26 in the next page. Over the period, apart from the increase in the conventional TV channels, the operators of DTH services have been adding several innovative offerings such as value added services (VAS), interactive services including movie on demand, gaming, shopping etc.

50.

Annual Report 2010-11 31

Figure 26: Growth of DTH sector in terms of the subscriber base (numbers in million)

CABLE TV SERVICES 51. The cable TV services sector is the largest pay television service sector with an estimated subscriber base of around 92 million subscribers. Figure 27 depicts

the percentage of cable homes in various states while Figure 28 depicts the growth of the cable TV sector in terms of number of subscribers, over the last decade.

Figure 27: Percentage of cable homes in various states

32 Annual Report 2010-11

Figure 28 : Growth in number of Cable TV subscribers (in millions)

52.

The cable TV services in India, at present, are mostly analogue (nonaddressable cable TV systems) in nature except for notified areas of Delhi, Mumbai, Kolkata and Chennai, where conditional access system(CAS) is in place. In the notified CAS areas, the pay

TV channels are carried through digital addressable system (CAS) and the Basic service tier, comprising of free to air (FTA) channels, is carried in the analogue form. Figure 29 depicts the city-wise growth in number of pay TV subscribers in the notified CAS areas

Figure 29: City-wise growth in number of subscribers in the notified CAS Areas in the last four years

Annual Report 2010-11 33

over last four years. Figure 30 depicts city-wise status of pay TV subscribers in the notified CAS areas, as on March 2011. There are an estimated 60,000 local cable operators and 6,000 MultiSystem Operators (MSOs) / Independent Cable Operators (ICOs). The maximum number of TV channels

carried in the cable network by any MSO, as reported to TRAI, is 310, whereas in conventional analogue form this figure is only 100. The maximum number of FTA and pay TV channels, being carried in the cable network over last four years is given in the Figure 31.

Figure 30 : Citywise status of pay subscribers in the notified CAS areas (as on March 2011)

Figure 31 : Maximum number of FTA and pay TV channels carried in the cable networks

34 Annual Report 2010-11

53.

The analogue Cable TV services have capacity constraints and are non addressable in nature. Digital technology offers requisite solution holding the promise for better satisfaction at all the levels of the distribution chain including consumers. With a view to address these issues, TRAI has been actively working to promote addressable systems and in line with this approach, TRAI undertook a comprehensive exercise. After duly taking into consideration all the aspects and the inputs received during the comprehensive consultation exercise, the Authority on 5 th August 2010, submitted its Recommendation on Implementation of Digital Addressable Cable TV systems in India to the Government.

RADIO 54. Radio is one of the most popular and affordable means for mass communication, largely owing to its wide coverage, terminal portability, low

set up costs and affordability. In India, Radio coverage is available in Shortwave (SW), Medium-wave (MW) and Frequency Modulation (FM) mode. Frequency Modulation (FM) Radio broadcasting due to its versatility is considered as main medium to provide entertainment, information and education. There were 245 private FM radio stations operational by March 2011, besides the public service broadcaster- All India Radio (AIR) having a network of 237 broadcasting centres with 149 medium frequency (MW), 54 high frequency (SW) and 177 FM transmitters. The coverage of AIR is 91.85% of the geographical area of the country, serving 99.18% of the population. Further, as on March 2011, out of the 123 licenses issued for the setup of community radio station 103 community radio stations were operational. The year-wise growth of private FM radio stations and community radio stations are depicted in Figure 32 and Figure 33 respectively.

Figure 32 : Growth in number of Private FM Radio Stations

Annual Report 2010-11 35

Figure 33 : Growth in number of Community Radio Stations in the Country

TELEPORTS 55. Globally, teleports have evolved as provider of complex solutions ranging from TV programme production and postproduction to content hosting and distribution & systems integration to network management. With the liberal up-linking guidelines in India, there has been a major shift of channels getting up-linked from abroad to India in view of lower operating costs and availability of skilled manpower. If India is developed as a Teleport hub then even those channels which are not for down-linking in India will be shifted to India. This will lead to generation of employment and earning of revenue as well as foreign exchange. In view of its technical capabilities and geographical location, India can provide up-linking facilities for TV channels to be viewed in other parts of the world. Recognising this opportunity, TRAI, in its recommendations dated 22nd July 2010

on issues related to Uplinking / Downlinking of Television Channels in India, had suggested to the Government to develop India into a teleport hub. 56. The growth in the number of permitted teleports in India, over the last four years, is depicted in Figure 34 and the list of teleports, permitted by Ministry of Information and Broadcasting, is placed at Annexure IV at the end of this report.

Figure 34 : Growth in number of permitted teleports in the country

36 Annual Report 2010-11

TRENDS IN THE TARIFF IN THE BROADCASTING SECTOR

57. In order to provide cost effective Broadcasting services to the consumer, TRAI has laid down the regulatory framework from time to time in form of tariff orders. The tariffs in Non-CAS area, notified CAS area and that for the addressable Platforms such DTH, HITS, IPTV etc are governed by the respective tariff orders issued by TRAI. The ARPUs in the broadcasting sector have remained flat at around Rs. 160 per month over last few years whereas the offering by the service providers besides the increase in number of conventional TV channels has also increased in terms of several innovative offerings such as value added services (VAS), interactive services including movie on demand, gaming, shopping etc, specially on the addressable platforms which indicate a healthy competition in the sector. One of the most significant developments in the DTH sector has been a steady decline in the cost of the STBs. Over the past four years the cost of STBs have come down from an average of Rs. 4000 to around Rs. 1,000/ - and the trend is likely to continue. This has made the once supposed to be the elitist service in the sector quite affordable for the common man. TRAIs tariff order dated 21st July 2010 for the addressable platforms mandates offering of the pay channels in a-la-carte form at the wholesale as well as at the retail levels. Further the whole sale pricing has been prescribed with a certain cap. With these provisions at the

wholesale and retail levels a trend is likely to emerge where the subscription pattern is consumer specific rather than defined by the service providers. It is already observed in the market that within the maximum of the minimum subscription amount of Rs. 150, which an operator can prescribe, as per the said tariff order, they are already offering different monthly packs, ranging from Rs. 90 per month per subscriber for 132 channels pack to Rs. 150 per month per subscriber for 186 channels pack. Notably, these packs also include a sizable number of pay channels. Thereby making available considerable choice of channels to the consumers.

STAKEHOLDERS IN CABLE AND SATELLITE TV SERVICE SECTOR

60. As of March 2011, the total number of TV channels registered with the Ministry of Information and Broadcasting was 649 which includes 155 pay channels. These channels are owned by around 250 broadcasters (content owners) and marketed by 24 distributors / aggregators. List of pay channels, distributors/aggregators and list of pay DTH operators are placed at Annexure V to Annexure VII at the end of this report respectively.

58.

BROADCASTING & CABLE SERVICES PERFORMANCE INDICATORS

61. The overall status of the broadcasting and Cable TV services sector is given in the Table 15. The performance indicator of the Broadcasting sector over the last four quarters is tabulated (Table 16).

59.

62.

Annual Report 2010-11 37

Table 15: Overall status of Broadcasting and Cable TV Services Number of households in the country (estimated) Number of TV households (estimated) Number of Cable TV subscribers (estimated) Number of pay DTH Subscribers registered with private service providers as on 31st March 2011 Number of Cable operators (estimated) Number of Multi System Operators (estimated) Number of pay DTH Operators Number of Channels as on 31st March 2011 Number of Pay Channels as on 31 March 2011 Number of FM Radio Stations (excluding All India Radio) as on 31st March 2011 Number of Licensed Community Radio Stations as on 31 March 2011 Number of Operational Community Radio Stations as on 31st March 2011 Number of Set Top Box installed in CAS notified areas of Delhi, Kolkata, Mumbai and Chennai as on 31st March 2011 Number of permitted Teleports in the country as on 31 March 2011 Table 16: Performance Indicator of Broadcasting Sector Broadcasting & Cable Services June 2010 Total Number of Registered Channels with I&B Ministry Number of Pay Channels DTH Subscribers registered with private Service Providers (in Millions) Number of Set Top Boxes in CAS areas Number of Private FM Radio Stations 515 150 23.77 Quarter ending Sept. 2010 526 154 26.44 Dec. 2010 604 155 32.05 March 2011 649 155 35.56
st st st

233 Million 143 Million 92 Million 35.56 Million 60,000 6000 6 649 155 245 130 108 0.8 Million 84

7,70,519 248

7,75,876 248

7,86,422 245

8,04,837 245

38 Annual Report 2010-11

PART-II REVIEW OF WORKING AND OPERATION OF THE TELECOM REGULATORY AUTHORITY OF INDIA

Annual Report 2010-11 39

40 Annual Report 2010-11

REVIEW OF WORKING AND OPERATION OF THE TELECOM REGULATORY AUTHORITY OF INDIA

1.

Part I of the Report has given a review of the general environment prevailing in the telecom sector including broadcasting and cable services and has highlighted the policies and programmes of the Government during 2010-11. The main thrust of TRAIs functioning is to create conditions for efficient competition and growth in the telecom sector including broadcasting and cable services together with better quality at affordable prices, in order to meet the objectives of New Telecom Policy, 1999 (NTP 99). In line with the mandate given under the TRAI Act, TRAI has played a catalytic role in the development of the telecom, broadcasting and cable services. It has been its endeavour to provide an environment, which is fair and transparent, encourages competition, promotes a level-playing field for all service providers, protects the interest of consumers and enables technological benefits to one and all. The Government of India issued a Notification dated 9th January, 2004 by which broadcasting and cable services have been brought within the ambit of telecommunication services in terms of section 2(k) of the Telecom Regulatory Authority of India Act, 1997 as amended by the TRAI (Amendment) Act, 2000. With this notification, the regulation of broadcasting and cable services has come under the purview of TRAI. Under the TRAI Act, 1997 TRAI is mandated, inter-alia, to ensure compliance of the terms and conditions of license, lay down the standards of quality of service to be provided by the service providers

2.

3.

Annual Report 2010-11 41

and ensure the quality of service, specify tariff policy and recommend conditions for entry of new service providers as well as terms and conditions of license to a service provider. TRAIs scope of work also includes consideration and decisions on issues relating to monitoring of tariff policy, commercial and technical aspects of interconnection, principles of call routing and call handover, free choice and equal ease of access for the public to different service providers, resolution of conflicts that may arise due to market developments and diverse network structures for various telecom services, need for up-gradation of the existing network and systems, and development of forums for interaction amongst service providers and interaction of the Authority with consumer organizations. The Government issued an order dated 9th January, 2004 under section 11(d) of the TRAI Act, which entrusted TRAI to make recommendations regarding terms and conditions on which the Addressable Systems shall be provided to the customers and the parameters for regulating maximum time for advertisements in pay channels as well as other channels. This order also entrusted to TRAI, the function of specifying the standard norms for, and periodicity of revision of rates of pay channels, including interim measures. 4. To formulate policies and recommendations, TRAI interacts with

various stakeholders such as the service providers, their organizations, Consumer Advocacy Groups / Consumer Organizations and other experts in this field. It has developed a process, which allows all the stakeholders and the general public to participate in policy formulation by offering their views whenever sought for. This process involves holding Open House Meetings arranged in different parts of the country, inviting written comments on e-mail and through letters, and having interactive sessions with stakeholders and experts to obtain different views and clarifications on policy issues. The Regulations / Orders issued by TRAI also contain an Explanatory Memorandum which explains the basis on which the decisions are taken. The participative and explanatory process adopted by TRAI has received wide acclaim. 5. TRAI also interacts with the consumer organizations / Non Government Organizations (NGO) in the telecom and broadcasting sector to obtain their views. It has a system of registering consumer organizations / NGOs connected with telecom functions and of interacting with them at regular intervals. TRAI has registered 41 (forty one) consumer organizations as on 31st March 2011 from all over the country and is constantly adopting measures for strengthening the consumer organizations. It also organizes Seminars and Workshops with the participation

42 Annual Report 2010-11

of International Experts on various technical issues and invites stakeholders, consumer organizations and other research institutes to attend these seminars. 6. Under Section 11 (1) (a) of the TRAI Act 1997, the Authority is required to make recommendations either suo moto or on a request from the licensor, i.e., Department of Telecommunications or Ministry of Information & Broadcasting in the case of Broadcasting and Cable Services. Recommendations given by TRAI to Government during 2010-11 are given below. i. Recommendations dated 11 th May 2010 on Spectrum Management and Licensing Framework Recommendations dated 20 th August 2010 on Efficient Utilization of Numbering Resources Recommendations dated 8 th December 2010 on National Broadband Plan Recommendations dated 18 th November and 22nd December 2010 on Status of Roll Out Obligations in respect of Licenses issued from December 2006 onwards Recommendations dated 8 th February 2011 on the 2010 Value of Spectrum in 1800 MHz band

vi.

Revised Recommendations dated 14th April 2010 on issues relating to Mobile TV services

vii.

Recommendations dated 30 th June 2010 on Foreign Direct Investment Limits for Broadcasting Sector Recommendations dated 22 nd July 2010 on Issues relating to Uplinking/Downlinking of Television channels in India Recommendations dated 5 th August 2010 on Implementation of Digital Addressable Cable TV Systems in India Revised Recommendations dated 9th February 2011, on 3rd phase of Private FM Radio Broadcasting. Revised Recommendations dated 22 nd February 2011 on policy issues relating to Uplinking / Downlinking of TV channels in India Revised Recommendations dated 22 nd February 2011 on Implementation of Digital Addressable Cable TV Systems in India

viii.

ix.

x.

ii.

xi.

iii.

xii.

iv.

7.

Following recommendations are outcome of the consultation process taken during the period 2010-11: (i) Recommendations on Telecom Equipment Manufacturing Policy

v.

Annual Report 2010-11 43

(ii)

Recommendations on Approach towards Green Telecommunications Recommendations on Te l e c o m m u n i c a t i o n s Infrastructure Policy

(iii)

(i)

Recommendations dated 11 th May 2010 on Spectrum Management and Licensing Framework

The Department of Telecommunications (DoT) had sought the Authoritys recommendations on the Recommendations /comments of the Committee on Allocation of Access (GSM / CDMA) spectrum and pricing of May 2009. In addition, TRAI had also been requested to furnish its recommendations on the terms and conditions of existing UAS/CMTS licence with respect to the duration of licences. DoT had further sought the Authoritys clarification on auctioning of all spectrum other than 800, 900 and 1800 MHz bands and Authoritys recommendations on the policy of no capping on the number of Access Service Providers in each service area in terms of pending applications for grant of new UAS licenses received from 26.9.2007 to 01.10.2007 and removing the arbitrage from the prevailing license for structures across various service providers. TRAI had issued a consultation paper on Overall Spectrum Management and review of license terms and conditions

dated 16 th October, 2009. Based on comments received in the consultation process and its own analysis, the Telecom Regulatory Authority of India (TRAI) issued its recommendations on Spectrum Management and Licensing Framework on 11th May, 2010. In these recommendations, the following issues have been dealt with: (i) Spectrum Requirement and Availability Licensing Related Issues Spectrum Assignment and Pricing Consolidation of Spectrum Spectrum Management

8.

(ii) (iii) (iv) (v) 10.

The summary of the recommendations are as follows:The Authority should be entrusted with the task of carrying out a review of the present usage of spectrum available with government agencies. 585-698 MHz may be earmarked for digital broadcasting services including Mobile TV. 698-806 MHz be earmarked only for IMT applications Spectrum in 800 and 900 MHz bands should be refarmed at the time of renewal of the licenses. A specific fund for spectrum refarming be created and that 50% of the realisation from all proceeds from spectrum including from the auction proceeds as well as from the Spectrum Usage charges should be transferred to this fund.

9.

44 Annual Report 2010-11

The contracted spectrum for all the access licences issued in or after 2001, is 6.2 MHz / 5 MHz in respect of GSM/ CDMA respectively. Keeping in view the scarcity of spectrum and the need to provide the contracted spectrum to the existing licensees, no more UAS licence linked with spectrum should be awarded. Accordingly, there is no need for any cap on the number of access service providers. This recommendation of no cap is only if the future licences are delinked from spectrum. Otherwise, the Authoritys specific recommendation is that no more licences should be given. All future licences should be unified licences and that spectrum be delinked from the licence. There should be uniform licence fee across all telecom licenses and service areas. IP-I category be also brought under the licensing regime with immediate effect.

Time

Habitation Habitation Habitation >10000 5000200010000 5000 100% 50% -

2 years from effective date 3 years from effective date 4 years from effective date

100%

100%

50%

100%

100%

100%

In the above roll out obligations, coverage of 90% or above habitations will be taken as compliance of the obligation.
q

A licensee may be allowed to cover the habitations having a population between 2000-5000 through intra service area roaming, subject to the condition that at least one third of the habitations shall be covered by its own network. Failure to fulfil the rollout obligations would entail penalty in the form of additional spectrum usage charges at the rates indicated. Those licensees who have covered 50% of the habitations with a population of 500-2000 be given a reduction of 0.5% in the annual licence fee. And those licensees who have covered 100% (90% & above to be treated as 100%) of the habitations with a population of 5002000 should be given a 2% discount in the annual licence fee.

q q

The licence fee for all the services, will progressively be brought to a uniform 6% of AGR over a four-year period. The licence fee and spectrum usage charges payable by each licensee shall be on actual AGR, subject to a minimum AGR. The existing roll out obligations in the CMTS/UAS licences be replaced by the following roll out obligations for all the service areas except the Metros. The rollout obligations for metros would continue to be in force.
q

Annual Report 2010-11 45

While renewing the licence, the Government should assign spectrum only upto the prescribed limit or the amount of spectrum assigned by it to the licensee before the renewal, whichever is less. The spectrum will be assigned at the current price, duly adjusted to the year of renewal. Keeping in view the value of 900 MHz spectrum, the Authority has recommended that on renewal of the licence, spectrum held by a licensee in the 900 MHz band shall be replaced by assignment of equal amount of spectrum in 1800 MHz. The framework under the new licensing regime should be as follows: (I) Unified licence covering UASL/ CMTS, NLD, ILD, Internet, IP-I and GMPCS; Class licence covering VSAT services; and Licensing through Authorisation covering PMRTS, Radio Paging and Voice Mail/Audio Tex/Unified Messaging Service. Broadcasting licences

Annual Licence fee of 6% on AGR will be levied.

q

The limit on spectrum to be assigned to a service provider will be 2X8MHz for all service areas other than in Delhi and Mumbai where it will be 2X10MHz. Similarly for CDMA spectrum the Authority has recommended that the limit on spectrum will be 2X5MHz for all service areas and 2X6.25 MHz in the Metro areas of Delhi and Mumbai. The use of subscriber linked criteria be done away with for assignment of spectrum. Spectrum in the 800,900 and 1800 MHz bands should not be subject to auction. The 3G prices be adopted as the Current price of spectrum in the 1800 MHz band. At the same time, Authority is separately initiating an exercise to further study this subject and would apprise the Government of its findings. The Current price of spectrum in the 900 MHz band be fixed at 1.5 times that of the 1800 MHz band. The Authority has recommended that this be also fixed as the price of Spectrum in the 800 MHz band. All the service providers having spectrum beyond the contracted quantum should pay excess spectrum charges at the Current price, pro-rated for the period of the remaining validity of their licence subject to a minimum of seven years. Service providers returning the excess spectrum shall be

(ii)

(iii)

(iv)
q

For Nationwide Unified licence an Entry Fee of Rs. 20 crore be levied. For Service area-wise licences, the Entry Fee may be Rs. 2 crore for the Metros and Category A service areas, Rs. 1 crore for Category B and Rs. 0.5 crore for Category C service areas. In addition,

46 Annual Report 2010-11

liable to return the 900 MHz spectrum if any and also pay the additional onetime charges at the Current price for a minimum period of three years.
q

The excess spectrum beyond 8 MHz would be charged at 1.3 times the current price. Spectrum usage charges, both for GSM and CDMA spectrum, should be at the rate of 0.5% for every MHz up to the contracted spectrum and at the rate of 1% for every MHz in respect of spectrum beyond the contracted quantity, subject to a limit of 10% in respect of GSM and 7% in respect of CDMA. The Authority has recommended that the changes effected on 25.2.2010 be suitably modified. The market share of the Resultant entity in the relevant market shall not be greater than 30 % of the total subscriber base and/or the AGR in a licensed telecommunication service area. No M&A activity shall be allowed if the number of UAS/CMTS access service providers reduces below six in the relevant market consequent upon such an M&A activity under consideration. Consequent upon the Merger of licences in a service area, the total spectrum held by the post merger Resultant entity shall not exceed 14.4 MHz for GSM technology. In respect of CDMA technology, the ceiling will be 10 MHz.
q q

As the resultant entity is entitled to only one block of 6.2 MHz/ 5MHz for the Entry fee paid, either of the parties to the merger should pay the Spectrum price i.e. the difference between the Current price and the sum already paid, before permission for merger is granted. The spectrum transfer charge, @5% of the difference between the transaction price and the total current price, shall be payable before permission is granted. The licence condition in the UAS licence be amended to stipulate that the promoters whose net worth/equity has been taken into consideration for determining the eligibility of the licence shall not dilute their equity below 51% for a period of 5 years or till the roll-out conditions have been fully accomplished, whichever is earlier. Any reduction below 51% shall be with the prior and specific permission of the licensor. Spectrum sharing will be permitted but in each case, it will be in the same licence service area and will be with the prior permission of the licensor, strictly in accordance with the guidelines being laid out. Permission for spectrum sharing will be given for a maximum period of 5 years. There shall be no renewal. Spectrum sharing will be allowed only between parties each of whom does not have more than 4.4MHz /2.5 MHz (GSM/CDMA) of spectrum. Annual Report 2010-11 47

Sharing will be allowed only if there are at least six operators in the LSA, postsharing arrangement. Spectrum sharing will not be permitted among licensees having 3G spectrum. Spectrum usage charges will be levied on both the operators individually but on the total spectrum held by both the operators together. In other words, if an operator X having 4.4MHz of spectrum shares 4.4 MHz of spectrum of another operator Y, then both X and Y will be liable to pay spectrum usage charges applicable to 8.8 MHz of spectrum. Spectrum trading should not be allowed in India, at least at this stage. This will be re-examined at a later date.

750 million connections including 450 million mobile connections and was designed to last till 2030, has come under severe strain with the mobile numbers having crossed that mark in 2009 itself. With the number of subscribers likely to exceed 1 billion by 2014, the situation calls for an urgent review to facilitate continued availability of numbers with minimum disruption to any service. These recommendations propose a solution in this regard. 13. In the recommendations, TRAI has proposed that the existing 10-digit numbering scheme should be continued to avoid inconvenience to the customers that would accompany any move to shift to an 11 digit numbering scheme. Giving a two pronged strategy, TRAI has recommended that India should migrate to an integrated numbering scheme for fixed and mobile services by 31 st December, 2011. In other words both fixed line and mobile phones will have a 10-digit number. This would make available enough numbers to cater to expansion of existing services and introduction of new services for the next 30-40 years. This integrated numbering will also facilitate extension of number portability to fixed lines. Till the integrated scheme is implemented the dialling of intra-circle calls from fixed lines to mobile will be with 0 prefixed. This would enable exploitation of spare capacity available in the sublevels of existing Short Distance Charging Area (SDCA) codes, to the extent of about

(ii)

Recommendations dated 20 th August 2010 on Efficient Utilization of Numbering Resources

Number resources have always played a central role in telecommunications and have acquired an important economic dimension with the liberalization of the telecommunications sector. Correspondingly significance of numbering as a regulatory instrument has also increased considerably with adequate, fair and transparent access to numbers becoming an essential part of ensuring a competitive telecommunications market. The existing National Numbering Plan 2003 (NNP 2003) that was designed for

11.

12.

48 Annual Report 2010-11

one billion numbers without affecting any telephone number or STD code. 14. Telephone numbers are a precious resource and should be utilized efficiently. In order to prevent accumulation of unutilized numbers by the service providers, the Authority has proposed that the service providers should not have more than 3 million unutilized numbers, in a service area, at the time of requesting a new block of numbers. For making allocation of numbers more efficient, TRAI has recommended automation of the allocation process. This would help service providers in getting allocations online.

phases. The first phase covering all cities, Urban areas and Gram Panchayats will be completed by the year 2012. Phase II will be the extension of the network to all the habitations having population more than 500, to be completed by the year 2013. This network will be established at a cost of about Rs. 66,000 crore It will be financed by USO fund and the loan given/guaranteed by Central Government. 17. A National Optical Fibre Agency (NOFA) will be set up to establish this broadband network. NOFA is proposed to be a 100% Central Government owned holding company. Besides being a Holding company, NOFA will also establish the network in all the 63 cities covered under Jawahar Lal Nehru National Urban Renewal Mission (JNNURM). A State Optical Fibre Agency (SOFA) will be formed in every State with 51% equity held by National Optical Fibre Agency (NOFA) and 49% by the respective State Government. NOFA should be the holding company of all the SOFAs. All the SOFAs, under the overall guidance of NOFA will establish the networks and backhaul in the rural areas and in the urban areas other than those cities covered under Jawahar Lal Nehru National Urban Renewal Mission (JNNURM). The National Broadband Plan envisages provision of 75 million broadband Annual Report 2010-11 49

(iii) Recommendations dated 8 th December 2010 on National Broadband Plan

15. India had just 10.30 million broadband connections in the country at the end of September 2010 as against the target of 20 million broadband subscribers by 2010, set by the Broadband Policy 2004. In order to spur broadband growth in the country, TRAI forwarded its recommendations on National Broadband Plan to the Government on 08th December 2010. TRAI has recommended establishment of a National Broadband Network. This network will be an open access optical fibre network connecting all habitation with population of 500 and above. This Network will be established in two

18.

16.

19.

connections (17 Million DSL, 30 Million cable and 28 million wireless broadband) by the year 2012 and 160 million broadband connections (22 million DSL, 78 million cable and 60 million wireless broadband) by the year 2014. 20. Government may notify the chares for Right of Way in consultations with the State Governments on priority basis and ensure availability of RoW to telecom service providers to provider various telecom services. The optional fibre network would support following bandwidths: a. 10 Mbps download speed per household in 63 metro and large cities (covered under JNNURM)

for every wireline connection by the year 2014. b. 4 Mbps download speed per household in 352 cities for every wireline connection by the year 2014. 2 mbps download speed per household in towns and villages for every wireline connection by the year 2014.

c.

Upload speed would be half of the download speed. The objective of national broadband Network is to provide fibre to home in 63 cities covered under JNNRUM. Fibre to kerb in all other cities (0.5 Km from any residence).

21.

22.

50 Annual Report 2010-11

23.

The Authority also recommended that Broadband connection may be defined as A data connection using any technology that is able to support interactive services including Internet access and support minimum download speed of 512 K ilo Bits per second (Kbps). In order to ensure affordability of Customer premises equipment cost, Government may review the duties levied on inputs and finished products used in providing broadband and Internet services. Customer premises equipment including modern and routers used for Internet and broadband may be considered for 100% depreciation in the first year.

(iv) Recommendations dated 18 th November and 22 nd December 2010 on Status of Roll Out Obligations in respect of Licenses issued from December 2006 onwards
26. In pursuance of Section 11(1)(b)(i) of TRAI Act, 1997 (as amended), TRAI had sought compliance of license terms and conditions pertaining to roll out obligations from all the service providers who had been issues licenses from December 2006 onwards. TRAI had analysed the reports in respect of 130 licenses that were issued from December 2006 onwards and vide its recommendation dated 18th November 2010, TRAI recommended cancellation of 38 UAS licenses in addition to levy of

24.

27.

25.

Annual Report 2010-11 51

liquidated damages, while in case of 31 licenses, TRAI recommended that cancellation of these licenses needs to be seriously considered after legal examination, besides imposition of liquidated damages. 28. Further, vide its recommendation dated December 2010 TRAI 22 nd recommended for cancellation of 5 licenses of M/s Idea / Spice in respect of Punjab, Karnataka, Maharashtra, Haryana and Andhra Pradesh service areas.

commercial points of view. The report determines the value of 1800 MHz spectrum in two trenches- price of contracted spectrum i.e. upto 6.2 MHz and price of incremental spectrum i.e beyond 6.2 MHz on per MHz basis for a period of 20 years. 31. The Authority duly considered the report and felt that while the figures given by the experts may be adopted, it should be done with realization that these are estimated figures and may or may not always match the exact market price. TRAI vide its letter No. 103-2/2011-MN dated 8th February, 2011 recommended that the price given by the experts be adopted as the best available figure. The Authority also recommended that the charging of spectrum in the 1800 MHz band beyond 6.2 MHz on the basis of these estimated figures, should be unambiguously subject to the condition that the final price could be suitably modified to reflect the market price based on the auction price in the service areas where auction is conducted. The estimates that have been worked out by the experts are for the year 2010.Given that they are based on data available upto 31 st March, 2010, the Authority recommended that these prices may be made applicable from 1.4.2010, prorated for the remaining validity of the respective licences while charging for excess spectrum.

(v)

Recommendations dated 8 th February, 2011 on The 2010 value of spectrum in 1800 MHz band
TRAI gave its Recommendations on Spectrum Management and Licensing Framework on 11th May, 2010. While recommending that pending further deliberations, the 3G price be adopted as the Current Price of spectrum, the Authority stated that it was separately initiating an exercise to further study the subject and would apprise the Government of its findings. The Authority had entrusted the study to four experts, who have submitted their report on The 2010 value of spectrum in 1800 MHz band dated 30th January, 2011. The report makes an assessment of the value of the 1800 MHz band spectrum from the technical as well as the

32.

29.

33.

30.

52 Annual Report 2010-11

(vi) Revised Recommendations on issues relating to Mobile TV services

q

and when the Policy for renewal of license is notified. The licensee may be allowed to assign or transfer the license only after completing the roll-out obligations. License fee be charged at 4% of Gross Revenue or 5% of reserve OTEF whichever is higher. The roll out obligation should be in three phases in the following manner: In the first phase, the licensee must commence the mobile TV transmission in all cities having a population (as per 2001 census) of more than one million and the State/UT capitals within the license area within twelve months from the date of allocation of spectrum. In the second phase, the licensee must commence the mobile TV transmission in all cities /towns having population (as per 2001 census) of one lakh or above within the license area within twenty four months from the date of allocation of spectrum. In the third phase, the licensee must commence the mobile TV Transmission in all the district headquarters within the license area within thirty six months from the date of allocation of spectrum.

34.

Referring to TRAIs earlier rd recommendations dated 23 January 2008, on Issues relating to Mobile TV services, the Government on 19 th January 2010, sought reconsideration of TRAI on some of the earlier recommendations related to allocation of spectrum, number of licenses per service area, clubbing of smaller states for forming an appropriate license area, tenure of license period and its renewal etc. TRAI sent its recommendations, after reconsideration, on these issues to the Government on 14th April 2010. The key points of the revised recommendations are as under. No entity should hold more than twenty five percent of the total number of permissions given in the country to prevent monopolization at national level for the first phase which was in addition to the stipulation that an entity should have only one license per service area. Any eligible entity, including UASL/ CMTS licensees can participate in the bidding process. The tenure of the license should be automatically extended for a further period of 10 years at the option of the licensee with payment of One Time Entry Fee (OTEF), however the decision regarding the OTEF at the time of renewal may be taken subsequently as

Delay to meet the roll out obligations should attract liquidated damages for Annual Report 2010-11 53

six months and subsequent defaults should result in cancellation of licenses and withdrawal of spectrum.

(vii) Recommendations dated 30 th June 2010 on Foreign Direct Investment Limits for Broadcasting Sector
36. TRAI had issued a Consultation Paper on foreign investment limits for the broadcasting sector on 15.01.2010. Based on the Consultation process and internal analysis, the Authority gave its recommendations to the Government on Foreign Direct Investment Limits for Broadcasting Sector on 30th June 2010. The key points of recommendations are:(i) Foreign investment limit for the Broadcast carriage services i.e. DTH, IPTV, Mobile TV, HITS, Teleport and National and State level MSOs who are upgrading to digital & addressable environment to be 74%. Foreign investment limit for LCOs to be 26%; Foreign investment limit of 26% for News & Current Affairs TV Channels and FM Radio. No restriction on Foreign investment for uplinking and downlinking of TV channels other than News & Current Affairs TV channels

(viii) Recommendations dated 22 nd July 2010 on Issues relating to Uplinking / Downlinking of Television channels in India
38. TRAI had issued a consultation paper on Policy issues related to Uplinking / Downlinking television channels in India on 15.03.2010. Based on the Consultation process and internal analysis, the Authority gave its recommendations to the Government on 22nd July 2010. The key points of recommendations are:a. No cap on number of satellite based TV channels meant for downlinking and uplinking from India; Revision of networth requirements for news and nonnews TV channels and teleports; Revision of Eligibility criteria for registration of a TV channel by including experience criterion for atleast one person holding the top management; Providing for a uniform validity period of 10 years for uplinking/ downlinking permission, Nontransferability of permission, revision of Permission fee and its periodicity etc. Initiative to develop India as a teleport hub

39.

37.

b.

c.

(ii)

(iii)

d.

(iv)

e.

54 Annual Report 2010-11

(ix) Recommendations dated 5 th August 2010 on Implementation of Digital Addressable Cable TV Systems in India
40. Cable and Satellite TV services in India have grown exponentially in the last seventeen years. However, the nature of the analogue cable TV services, which forms the bulk of the cable and satellite TV universe, poses a number of problems. Capacity constraints and the non-addressable nature of the analogue cable TV services results in several problems including complex business transactions and a high level of litigation. Digital technology offers the requisite solution holding the promise of better satisfaction at all levels of the distribution chain including the consumers. Besides, digital addressable systems can enhance the scope of the services offered including broadband services. After duly taking into consideration all aspects and the inputs received in the consultation process, the Authority on 5 th August 2010 gave Recommendations on Implementation of Digital Addressable Cable TV Systems in India. The key recommendations are as under:31st December, 2013 to be the sunset date for Analogue TV services in the country and implementing the migration from analogue nonaddressable to digital addressable cable TV system in a phased manner comprising four phases;

Providing for incentives to various stakeholders in the form of granting tax holiday to those who have set up a digital addressable distribution network on or before the sunset date; reducing the custom duty to zero for all digital headend equipment and STBs; Granting Right of Way (ROW) to MSOs/ LCOs for laying down cables, on nonexclusive basis; rationalization of taxes/ levies on the Broadcasting distribution Sector; and educating all the stakeholders about the benefits of digital addressable cable TV systems, to achieve the targets of digitization with addressability.

(x)

Revised recommendations dated 9th February 2011, on 3rd phase of Private FM Radio Broadcasting.
Referring to TRAIs earlier nd recommendations dated 22 Feb. 2008, on 3 rd Phase of Private FM Radio Broadcasting, the Government on 27th Jan. 2011, sought recommendations of TRAI on the issues of tendering process, reserve price, annual license fee and license period. TRAI sent its recommendations on these issues to the Government on 9th Feb 2011. The following was stated: TRAI would have no objection regarding adoption of the 3G ascending e-auction methodology mutatis mutandis for awarding licenses for FM Radio Phase III. It was also suggested that the Ministry of Information and Annual Report 2010-11 55

42.

41.

Broadcasting may also ensure that all related administrative issues are duly addressed while finalising the ecosystem and procedures for the eauction.
q

The GoM has recommended reserve prices for new channels based on the actual prices received during the second phase for comparable cities. The Authority has no objection to the proposed action. The Authority has no objection to the validity period of 15 years for the licenses, as recommended by the GoM

for kids/scientific/educational channels the networth requirement should be Rs 5 Cr. and for societies/companies, sponsored by universities for the purpose of setting up of educational channels, the networth requirement may be dispensed with.

(xii) Revised Recommendations dated 22 nd February 2011 on Implementation of Digital Addressable Cable TV Systems in India
44. Referring to TRAIs earlier recommendations dated 5th August 2010 on Implementation of Digital Addressable Cable TV Systems in India, the Government on 27th January 2011 sought revised recommendations of TRAI, amongst other issues, on roadmap for implementation of Digital Addressable Cable TV Systems in India. TRAI sent its recommendations on the referred issues to the Government on 22nd February 2011. The key points of the revised recommendations were as under:The revised timeline, for the first phase covering the four metro cities was recommended to be Dec 2011, for the second phase covering 38 cities having population more than 1 million was recommended to be Dec. 2012 and for the third and fourth phase covering all the urban area as well as rest of India was recommended to be Dec 2013. Setting up of a special task force in the Ministry of Information and

(xi) Revised Recommendations dated 22 nd February 2011 on policy issues relating to Uplinking / Downlinking of TV channels in India
43. Referring to TRAIs earlier recommendations dated 22nd July 2010 on policy issues relating to Uplinking / Downlinking of TV channels in India, the Government on 02.02.2011 sought revised recommendations of TRAI, on certain issues. TRAI sent its revised recommendations to the Government on 22.02.2011. The revised recommendations were mainly related to the networth requirement of the applicant companies, their eligibility criteria including the experience criterion of the person(s) holding the top management position in a media company and for introduction of provision for roll out obligations. The Authority also re-iterated its stand that

56 Annual Report 2010-11

Broadcasting with all the stakeholder, in order to draw a detailed plan and for overseeing strategies for adhering to the time lines.

products by the year 2015 and 80% by the year 2020.

q

(xiii) Recommendations on Telecom Equipment Manufacturing Policy:

45. To bring the issues relating to telecom manufacturing in India, TRAI issued a pre-consultation in May 2010. Based on the comments received and further study, a consultation paper on Encouraging Telecom Equipment Manufacturing in India was issued on 28th December 2010 for obtaining views of the stakeholders. After analysis of the comments and OHDs, TRAI issued recommendations on Telecom Equipment Manufacturing Policy on 12 th April 2011. In these recommendations, the specific targets that seek to achieve would be: To meet 45% of the domestic demand through domestically manufactured

To provide market access to Indian products to the extent of 25% by the year 2015 and 50% by the year 2020. To increase value addition in domestic manufactured products to 35% by the year 2015 and 65% by the year 2020. To achieve the proposed targets the followings recommendations have been made:

1.

Set up a Telecom Equipment Manufacturing Organisation (TEMO) to act as a coordinator between manufacturers and service providers. Convert TEC into an autonomous Testing and certification Organisation (TCO) which will test and certify both Indian and global products. Identify ten telecom clusters to promote the TEM, and to remove infrastructural disabilities in these clusters in a time bound manner.

2.

3.

Annual Report 2010-11 57

4.

Set up Telecom Research & Development Fund (TRDF) to promote research, IPR creation, development activities and Research Park to be established to facilitate R&D, innovation, IPR creation and commercialization for fast and sustainable growth of telecom industry. Set up a Telecom Manufacturing Fund (TMF) of the order of Rs 3000 crore, which will provide venture capital to indigenous manufacturers in the form of low cost finance for supporting pre and post commercialisation project development and brand creation. Set up Telecom standards Organisation (TSO) for carrying out all works related to telecom standards, driving international standards and drawing up specifications of the equipment to be used in the Indian telecom networks, including security standards. Financial incentives have been proposed for Indian manufactured product (IMP) and Indian products (IP). Fiscal incentives have also been proposed and

the stakeholders, TRAI issued consultation paper on Green Telecommunications on 3rd February 2011. The consultation paper took up the following important issues for deliberations:
q

Estimation of the carbon footprint of the telecom sector in India. Need and framework of carbon credit policy for the Indian telecom sector Measures to reduce the telecom sector carbon footprint Promoting use of energy efficient devices and renewable sources of energy. Standards, testing and certification products and services as green. e-waste management Based on the comments received during the consultation and its own analysis, TRAI released its recommendations on Approach towards Green th Telecommunications on 12 April 2011. The key recommendations are:

5.

6.

7.

To encourage increased production of electronic components, measures have also been proposed.

Measures towards greening the sector should be part of National Telecom Policy. In the next 5 years 50% of all rural towers and 33% of all urban towers to be powered by hybrid power (Renewable energy sources + Grid power) All equipments, products and services deployed in the sector should be energy

(xiv) Recommendations on Green Telecommunications:

46. TRAI issued a pre-consultation paper on Green Telecom on 18th June, 2010 for obtaining views of the stakeholders. Based on the comments received from

58 Annual Report 2010-11

and performance assessed and certified Green passport by 2015.

q

All mobile phones should be free of brominates, chlorinated compounds and antimony trioxide by 2015. All mobile manufactures / distributors should place collection bins at appropriate places across the country for collection of e-waste mobile phones, batteries, chargers etc.

analysis, TRAI issued the Recommendations on Telecommunications Infrastructure Policy on 12th April 2011. The key points of the recommendations are: Telecom infrastructure should be treated as an essential infrastructure Tax benefits should be provided to Telecom infrastructure provider companies under Section 80 IA. Infrastructure Providers (IP-1) should be allowed to install and share active network limited to antenna, feeder cable, Node B, Radio Access Network (RAN) and transmission system subject to the condition that they are brought under the proposed Unified Licensing Regime.

(xv) Recommendations on Te l e c o m m u n i c a t i o n s Infrastructure Policy

47. TRAI issued a consultation paper on Issues related to Telecommunications Infrastructure Policy on 14th January 2011. Based on the comments received from the stakeholders and its own

Annual Report 2010-11 59

Local authorities should grant right of way permission within 45 days and uniform reinstatement charges should be applicable for laying the cables. Dispute resolution authority should be appointed for dealing with the cases of refusal of permission or imposition of conditions Indoor Building Solutions (IBS) & Distributed Antenna System (DAS) should be deployed for reduction in number of towers, better coverage and efficient spectrum utilisation. All ministries should be advised by DoT to provide, within next one year, IBS/ DAS solutions in all central Government building including central PSU building, Airport and building falling under their jurisdiction & control.

All State Government should be similarly advised to provide/ mandate, within next one year, IBS/DAS solutions in all buildings including hospitals having more than 100 beds and shopping malls of more than 25000 square feet super built area. As far as outdoor coverage is concerned, DAS should be mandated for deployment in 63 JNNURM cities within 18 months after completion of optical fibre network in these cities under the National Broadband Plan. TEC should develop standards for all types of towers used in telecommunications. These standards should be made mandatory for all the service providers. Licence condition should be amended to include that all

60 Annual Report 2010-11

the towers will conform to the standard developed by TEC. Camouflaging should be made mandatory in areas of heritage, environmental or architectural importance and Infrastructure sharing should be mandated in locations of heritage, security and environmental importance. A revised framework for facilitating growth of mobile virtual network operators (MVNO). Internet exchange points (IXPs) should be brought under Class licence and Data centres should be permitted to connect directly to the IXPs for facilitating efficient & effective routing of fast growing domestic internet traffic. All Government websites should be made IPv6 compliant by 2012 and IPv6 test bed facilities, already available with academic institutions like IITs, IISc should be extended to National Institutes of Technology (NITs) for easy access to stakeholders. DoT should address all State Governments to direct the Power Distribution companies in the state to provide grid power connectivity on priority for telecom tower sites. During the year 2010-11, TRAI issued the following Regulations: The Telecommunications Mobile Number Portability (Second (ii)

Amendment) Regulations, 2010 dated 24th November 2010 The Telecom Commercial Communications Customer Preference Regulations, 2010 dated 1st December 2010 The Telecom Commercial Communications Customer Preference (Amendment) Regulations, 2010 dated 14th December 2010 The Telecom Commercial Communications Customer Preference (Second Amendment) Regulations, 2010 dated 28th December 2010 The Telecom Commercial Communications Customer Preference (Third Amendment) Regulations, 2010 dated 31st January 2011 The Telecom Commercial Communications Customer Preference (Fourth Amendment) Regulations, 2010 dated 28th February 2011 The Telecommunication Customer Education and Protection Fund (Amendment) Regulations, 2011 dated 7th March 2011

(iii)

(iv)

(v)

(vi)

(vii)

48.

(viii) The Telecom Commercial Communications Customer Preference (Fifth Amendment) Regulations, 2010 dated 18th March 2011 (ix) The Telecommunications (Broadcasting and Cable Services) Interconnection (Sixth Amendment) Regulations, 2010 dated 30th July 2010

(i)

Annual Report 2010-11 61

49.

The details of these Regulations are as under:

(i)

The Telecom Commercial Communications Customer Preference Regulations 2010 and Amendments
TRAI framed an important Regulation to curb Unsolicited Commercial Communications and dissatisfaction of customers on this account. For this purpose, TRAI initiated the consultation process in May 2010 and after extensive discussions with all stakeholders, TRAI has issued The Telecom Commercial Communications Customer Preference Regulations 2010. Unlike the previous Regulations which provided only for a Do Not Call Registry, the Regulations issued provide a wide choice to the customer. He may choose to be under the fully blocked category which is akin to the Do Not Call Registry under the previous Regulations or he may choose the partially blocked category, in which case he will receive SMSs in the category/categories chosen by him. The partially blocked category is like a Do Call Registry. By the continuous effort of the Authority, all the provisions of the principal regulations came into force w.e.f. 27th September 2011. Regulations shall come into force as may be specified by the Authority from time to time. Registration of Telemarketers shall come

in force from 15th January, 2011.Other provisions shall come into force from 1st February 2011 3rd Amendment Registration of Telemarketers has come in force from 15 th January, 2011. Registration of customer preference shall come in force from 10 th February 2011 and the other provisions of the Regulations from 1 st March, 2011. Registration of Telemarketers has come in force from 15 th January, 2011. Registration of customer preference has come in force from 10 th Feb, 2011 and other provisions from 21 st March, 2011. Other provisions from such dates as may be specified by the Authority.

50.

4th Amendment

5th Amendment

(ii)

The Telecommunications Mobile Number Portability (Second Amendment) Regulations, 2010 dated 24th November 2010
TRAI issued the Telecommunication Mobile Number Portability Regulations, 2009 on 23rd September 2009. Mobile Number Portability (MNP) allows the subscribers to retain their existing mobile telephone number when they move from one Access Provider to

1st Amendment

51.

2nd Amendment

62 Annual Report 2010-11

another irrespective of the mobile technology or from one cellular mobile technology to another of the same Access Provider, in a licensed service area. The facility of retention of existing mobile telephone number despite moving to a new telecom service provider helps the subscriber maintain contacts with his friends / clientele. Introduction of MNP also helps in increasing competition between the service providers and acts as a catalyst for the service providers to improve their quality of service. The Second Amendment to this Regulation was issued on 24th November 2010, and by this certain provisions of the principle regulations came into force in Haryana Service Area with effect from 25 th November 2010. Further, in terms of this amendment, the timelines for Donor operator in the regulation 10 of the principal regulations was modified from 24 hrs to 4 working days due to security reasons.

Education and Protection Fund Regulations, 2007. To give better representation to the Consumer Advocacy Groups registered with TRAI in the Committee on Utilisation of Telecommunication Consumers Education and Protection Fund, the Authority made amendment the Telecommunication Consumers Education and Protection Fund Regulations, 2007 (6 of 2007) vide notification dated 7th March 2011 after inviting comments of all stakeholders, thereby increasing the representation of CAG in the Committee from two to five.

(iv) The Telecommunication (Broadcasting and Cable Service) Interconnection (Sixth Amendment) Regulation
53. The consultation paper for the purpose was issued on 6 th April, 2010. The consultation paper had grouped the issues posed for consultation into two broad categories, namely, interconnection issues and tariff issues. Issues relating to tariff have been addressed separately. Considering all the aspects of the matter as emerging from the consultation process, the Authority amended the interconnection regulation by amending the definition of the HITS operator to provide for use of both C and Ku band by these operators. Since the policy guidelines issued by the Ministry of Information and Broadcasting permit HITS operator to distribute multi channel TV programmes on its own cable network (after first downlinking the signals at its

(iii) The Telecommunication Customer Education and Protection Fund (Amendment) Regulations, 2011 dated 7 th March 2011
52. To enable the service providers transfer unrefunded money of customers lying with them to an account opened in the Corporation Bank in the name of Telecommunication Consumers Education and Protection Fund (TCEPF), the Authority had notified a regulation called the Telecommunication Consumers

Annual Report 2010-11 63

terrestrial receiving station) and also provides for HITS operator to be a passive infrastructure facility provider to other MSO or consortium of cable operators, the scope of the existing definitions of HITS operator and multi system operator have been appropriately enlarged. Accordingly, The Telecommunication (Broadcasting and Cable Service) Interconnection (Sixth Amendment) Regulation was issued on 30th July 2010. 54. During the year 2010-11, TRAI issued the following tariff order.

56.

(i)

The Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Service) Tariff Order 2010 dated 21st July 2010
TRAI notified the The Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order, 2010 (1 of 2010) dated the 21st July 2010. The cable and satellite TV sector of the country is largely analog and non- addressable. The analog systems have capacity and quality constraints and cannot offer choice to the subscribers. The Authority has been working actively to promote Digital Addressable systems so as to improve the overall quality of service to the consumers. The tariff order issued, on 21st July 2010, is in line with these efforts. This tariff order covers all digital addressable systems such as DTH, HITS, IPTV, and digital addressable Cable TV.

55.

The Tariff Order provides for a-la-carte choice of channels to the subscribers. In addition to a-la-carte provisioning of channels, the operator can also offer bouquet of channels. The price of channels / bouquets to the subscribers is under forbearance but there shall not be any increase in subscription charges for 6 months from the date of enrolment with the operator. An operator can specify monthly subscription, not exceeding Rs 150/(excluding taxes) per month per subscriber, for availing the services of the operator. At the wholesale level, the broadcaster are mandated to offer channels on a-la-carte basis to the operators of addressable platforms, at a rate which shall not exceed 35% of their corresponding rates in nonaddressable system. In addition to this the broadcasters can optionally offer bouquets also, however the composition of the bouquets has to be same as that offered in the nonaddressable system, and its rates shall also not exceed 35% of their corresponding rates in the nonaddressable system. TRAI issued following directions to the Service Providers during the year 201011 for compliance of its order / Regulations: Direction dated 3rd December 2010 to all Cellular Mobile Telephone Service Providers and Unified Access Service Providers regarding changes being levied on the subscriber for sending SMS to short code number 1900,

57.

(i)

64 Annual Report 2010-11

(ii)

Direction dated 18th January 2011 to all Cellular Mobile Telephone Service Providers, Unified Access Service Providers and Mobile Number Portability Service Providers regarding implementation of Mobile Number Portability in all Telecom Service Areas w.e.f 20th January 2011, Amendment dated 21st January 2011 of the Direction of 10th February 2010, to all Cellular Mobile Telephone Service Providers, Unified Access Service Providers and Mobile Number Portability Service Providers regarding unique porting code Direction dated 22 February 2011 to M/s Idea Cellular Ltd., regarding application of Interconnection Usage Charge on Short Message Service (SMS) Direction dated 22nd February 2011 to M/s Bharti Airtel Ltd., regarding application of Interconnection Usage Charge on Short Message Service (SMS) The details of the directions issued to the Service Providers during the year 2010-11 are discussed below.
nd

(iii)

Service Providers to treat the SMS sent to short code number 1900 requesting for unique porting cord for the purpose of Mobile Number Portability, as ordinary SMS for the purpose of charging and the rate for such SMS shall not exceed the tariff applicable for ordinary SMS under the tariff plan opted by the subscriber.

ii)

Direction dated 18th January, 2011 regarding implementation of Mobile Number Portability in all Telecom Service Areas w.e.f. 20th January 2011.
Through this Direction, the Authority brought the Regulation 6 (Eligibility criteria for making a porting request), 7 (Request for porting of Mobile Number), 8 (Action by recipient operator), 9 (Action by MNP Service Provider), 10 (Action by donor operator), 11 (Porting of mobile number), 12 (Grounds for rejection of porting request by donor operator) and 13 (Withdrawal of porting request) of the Telecommunication Mobile Number Portability Regulations, 2009 into effect in all telecom service areas in the Country from 20th Jan. 2011.

60.

(iv)

(v)

58.

i)

Direction dated 3 rd December 2010 to all Cellular Mobile Telephone Service Providers and Unified Access Service Providers regarding changes being levied on the subscriber for sending SMS to short code number 1900
Through this direction, the Authority directed the Cellular Mobile Telephone Service Providers and Unified Access

iii)

Direction dated 21st January 2011 regarding Amendment to Direction No. 116-9/2009-MN dated 10th February 2010
TRAI vide its Direction dated 21 st January 2011 amended the Direction dated 10th February 2010. As per the Direction dated 10 th February 2010,

61.

59.

Annual Report 2010-11 65

Unique Porting Code (UPC) shall consist of eight characters of which the first two characters shall be alphabets which denote the service provider code and the service area code specified by the Authority in the Annexure A and B attached to said Direction and the remaining 6 characters shall contain 1 to 9, A-N & P-Z only, and small letters and the alphabet O shall not be allowed. 62. Mobile Number Portability has been implemented in Haryana Service area from 25 th November 2010 and the reports received from the service providers revealed that the number of rejections occurred due to entry of incorrect unique porting code by the subscribers / Recipient Operators is quite high which is primarily due to mistakes in either reading or writing of alpha numeric characters as some alpha-numeric characters e.g. I & l, U & V, S & 5 etc. are prone to be wrongly entered. Therefore, in the interest of consumer, the Authority made the amendment in the Direction dated 10th February 2010 so as to make the format simple. The revised UPC format shall consists of eight characters of which the first two shall be alphabets that denote the Service Provider code and Service Area code specified by the Authority in the Annexure A and B attached to the Direction and the remaining six character shall contain numeric character 1 to 9 only, and the character

0 is not allowed. (iv) Direction dated 22nd February 2011 to M/s Idea Cellular Ltd., regarding application of Interconnection Usage Charge on Short Message Service (SMS) Direction dated 22nd February 2011 to M/s Bharti Airtel Ltd., regarding application of Interconnection Usage Charge on Short Message Service (SMS) With a view to ensure compliance of provisions of Schedule IV of Telecommunications Interconnection Usage Charges Regulations, 2003 dated 29 th October 2003, the Authority directed M/s Bharti Airtel Ltd. and M/s Idea Cellular Ltd. to stop applying discriminatory termination charges on SMS. During the year 2010-11, TRAI had initiated sixteen consultation papers. Out of these consultation processes, eight consultations have culminated in issue of recommendation / Regulations/ Orders. The remaining eight Consultation Papers on which the process of consultation has not been concluded are as follows:

(v)

64.

65.

63.

(i)

Consultation Paper dated 2 nd August 2010 on Review of measures to protect interest of consumers in the telecom sector
While increasing telecom service penetration is bringing in more people in its fold, value added services are gaining increasing share of the sector. Effective protection of consumer

66.

66 Annual Report 2010-11

Annual Report 2010-11 67

68 Annual Report 2010-11

interest continues to be of paramount importance. TRAI has issued various regulations from time to time on this issue. While these regulations have helped address consumer grievances, nevertheless, it is the endeavour of TRAI to continually evolve the grievance redressal mechanism for further benefit of the consumers. In order to initiate focused discussion on all the pertinent issues, the Authority issued a consultation paper on Review of measures to protect the interest of consumers on 2nd August 2010.

(iii) Consultation Paper dated 13 th October 2010 on Certain Issues relating to Telecom Tariffs
68. Transparency in the provision of telecommunication services and tariff offers has always been and continues to be of prime concern to the Authority. TRAI has in the past taken several steps for enhancing transparency in tariff offers. In the context of representations from consumers and their representatives seeking further effective transparency measures, TRAI issued a Consultation Paper on Certain Issues relating to Telecom Tariffs on 13th October 2010.

(ii)

Draft Amendment to the Intelligent Network Services in Multi Operator Multi Service Scenario Regulations, 2006
Subsequent to acceptance of TRAIs recommendation Provision of Calling Cards by Long Distance Operators by DOT and simultaneous resultant amendment in the related clauses of the NLD and ILD Licences agreement, NLDOs and ILDO became eligible to issue calling cards for national and international long distance calls respectively. Amendment to the IN Regulations became necessary so that the Service Providers can enter into agreement with all other service providers who are already providing IN based services or would start IN based services at a later date in a time bound manner in the consumer interest. Draft amendment to the said regulations was issued to get comments of the stakeholders.

67.

(iv) Consultation Paper dated 28th October 2010 on Quality of Service requirements for delivery of basic financial services using mobile phones
69. An Inter Ministerial Group (IMG) constituted by the Government of India has prepared a framework for the delivery of basic financial services using mobile phones. The group has entrusted TRAI with the task of ensuring Quality of service for financial services. In order to initiate focused discussion on all the pertinent issues regarding quality of service parameters required to support financial transaction using mobile telephones, TRAI issued a consultation paper on Quality of Service requirements for delivery of basic financial services using mobile phones on 28th October 2010.

Annual Report 2010-11 69

(v)

Consultation Paper dated 2 nd November 2010 on Issues relating to blocking of IMEI for lost/stolen Mobile handsets
Presently, there is no mechanism in place to block a mobile phone in case it is lost. TRAI issued this consultation paper, which brings out various issues relating to blocking of IMEI for lost/ stolen mobile handset.

(vi) Consultation Paper dated 3 rd November 2010 on Revenue Sharing Arrangement for Intelligent Network Services
71. It was observed that despite being allowed by the IN Services Regulation to do so, some of the service providers could not arrive at mutually agreed revenue share arrangement. Also, even after permission being granted to the NLD and ILD operators for issuing calling

70.

70 Annual Report 2010-11

cards, no agreement were being filed with TRAI, by any of the service providers, even after a lapse of more than one year of amendment of licence conditions. Some of the service providers requested TRAI to prescribe interconnection and commercial arrangement between service providers for calling card services. To address these issues, the Authority issued the consultation paper on Revenue Sharing Arrangement for Intelligent Network Services on 3rd November 2010 to arrive at a framework by which interconnecting service providers may be fairly compensated for IN services.

(vii) Consultation Paper dated 25th January 2011 on Issues arising out of provisioning and Delivery of Basic Financial Services using Mobile Phones in the context of Pricing of Services by mobile Service Providers
72. Despite the expansion of the banking network during the last four decades, a sizeable proportion of the households, especially in rural areas, do not have a bank account. The fast growing roll-out of mobile services into these areas is seen as a medium to deliver basic financial services to this segment of

Annual Report 2010-11 71

population. An Inter Ministerial Group (IMG) constituted by the Government of India has prepared a framework for the delivery of basic financial services using mobile phones. This framework entrust TRAI with the task of resolving all issues arising out of the provisioning and pricing of such services by the Mobile Service Providers. In order to identify and address the various issues related to the provisioning and pricing of delivery of financial service using mobile phone, the Authority has issued this consultation paper.

in the specific context of policy framework which has been discussed in the previous parts is reviewed in the following paragraphs in respect of (A) Rural Telephone Network; (B) Expansion of Telephone Network; (C) Entry of Private Sector in basic and value added service; (D) Technical Compatibility and effective interconnection with service providers; (E) Telecommunication Technology; (F) Implementation of National Telecom Policy; (G) Quality of Service; and (H) Universal Service Obligation are elaborated below.

(viii) Consultation Paper on Technical Interoperability of the DTH Set Top Boxes (STB)
73. DTH services in India have registered a very impressive growth since their inception in the year 2003. DTH service providers currently follow different standards in terms of transmission, compression and encryption technologies. Technical interoperability enables subscriber to receive signals from any DTH service provider using same STB. Referring to the earlier recommendations of TRAI on the subject, Government requested TRAI to reconsider the issue of technical interoperability in the DTH Services. To undertake the issue with the stakeholders, TRAI issued a consultation paper on Technical interoperability of the DTH set top boxes on 20th August 2010. Further the working and operation of Telecom Regulatory Authority of India

(A) & (B) RURAL TELEPHONE & EXPANSION OF TELEPHONE NETWORK

75. TRAI has always been conscious of the need for expanding the telephone network in rural areas. In June, 2010, again, it has launched a Consultation Paper on the National Broadband Plan which has received wide and enthusiastic response from all stakeholders. Based on the Consultation process and internal analysis, the Authority gave its recommendations on National Broadband Plan to the Government on 08th December 2010. Through the recommendations on National Broadband Plan, TRAI has recommended for establishment of a National Broadband Network. This network will be an open access optical fibre network connecting all habitation with population of 500 and above. This Network will be established in two phases. The first phase covering all cities, urban areas and Gram Panchayats

74.

72 Annual Report 2010-11

will be completed by the year 2012. Phase II will be the extension of the network to all the habitations having population more than 500, to be completed by the year 2013. This network will be established at a cost of about Rs. 66,000 crore It will be financed by USO fund and the loan given/guaranteed by Central Government.

(C)

ENTRY OF PRIVATE SECTOR IN BASIC AND VALUE ADDED SERVICES

At present, there are a total of 279 Access Service licensees providing basic and cellular mobile services in the country. The license wise break up is as below: Number of licences 2 (PSUs- BSNL and MTNL) 37 240 Value Added Services are attaining increasing importance as variety of applications and services can be provided through mobile phones meeting the informational, entertainment and other needs of the customers. TRAI in its recommendations on Spectrum Management and Licensing Framework issued in May 2010, recognised the need to develop a healthy ecosystem for value added services and indicated to initiate a consultation process separately to

identify measures for the proper growth of the VAS industry. In consultation with TRAI, a study paper on Mobile Value Added Services (MVAS) A vehicle to usher in inclusive growth and bridge the digital divide was released by ASSOCHAM in January 2011. The study paper identified issues for the growth of MVAS industry including policy framework, support infrastructure and high equilibrium ecosystem.

76.

(D) TECHNICAL COMPATIBILITY AND EFFECTIVE INTERCONNECTION BETWEEN SERVICE PROVIDERS

78. To facilitate seamless telecommunication across networks, it is necessary that different networks interconnect. The licence condition also prescribes that all access providers should interconnect with each other and with national and international long distance operators networks. Interconnection is the lifeline of telecommunications. Interconnection allows subscribers, services and networks of one service provider to be accessed by subscribers, services and networks of the other service providers. Interconnection Usage Charge (IUC) are charges payable by one telecom operator to the other for use of the latters network either for originating, terminating or transiting/carrying a call. The regulatory framework for interconnection and interconnection usage charges was established through the various Regulations issued by TRAI. The prevailing IUC Regulation dated 9th Annual Report 2010-11 73

Type of Licence Basic CMTS UAS 77.

79.

March 2009 became effective on 1 st April 2009. 80. During the year, to review the IUC regulation, TRAI issued a preconsultation paper on 24th December 2010 wherein the service providers were requested to furnish information on various aspects of IUC. Taking into consideration the inputs provided by these service providers and associations, a detailed consultation paper was issued on 27th April 2011 and an addendum thereto on 29 th April 2011. With a view to ensure compliance of provisions of Schedule IV of IUC Regulation, TRAI has also issued direction dated 22nd February 2010 to M/s Bharti Airtel Ltd. and M/s Idea Cellular Ltd. wherein, the Authority directed them to stop applying discriminatory termination charges on SMS.

of an area of topical interest and a Quarterly Technology as a reference material for some of the finest papers published in telecommunications journals. TRAI also organises seminars and workshops on new developments is telecom technologies and issues study reports for the benefit of the industry. Some of the important activities undertaken in this regards are as follows: (i) 82. Next Generation Network (NGN) Next Generation Network (NGN) is an area of contemporary importance. TRAI accelerated its efforts in this area during the financial year. After tracking international developments, it decided to engage an international consultant with considerable international experience for assisting TRAI in making a consultation paper that could be used to elicit comments from the stakeholders for establishing appropriate policy and regulatory framework on NGN. An Expression of Interest (EOI) was floated on 5th January 2011 for consultancy services on migration to Next Generation Networks (NGN). This resulted in eventual selection of M/s SBR Juconomy of Germany to prepare an exhaustive report and a consultation paper on NGN. Work on these documents is under progress. Publication of Technology Digest Following its decision to indentify and share technology trends with the

(E)
81.

T E L E C O M M U N I C AT I O N TECHNOLOGY
Development of telecommunications technology has a profound impact on how regulatory practices evolve over time. Through research and analysis TRAI seeks to understand the drivers of change in telecommunications particularly convergence in various forms. Of special importance are the implications of new development on the network, services and regulation. To develop useful knowledge base and share it with the industry, TRAI decided to publish a monthly technology digest consisting of a fairly detailed coverage

(ii) 83.

74 Annual Report 2010-11

industry, TRAI has decided to publish a monthly Technology Digest. Some of the areas that have been identified for publication are Backhaul Systems, Advanced Antenna Technologies, Machine to Machine Communication, Next Generation Optical Access and Cognitive Radio Systems. Preparations are underway to publish quarterly journal consisting of some of the best telecommunications articles published in international journals in the last 2-3 years. To this end an editorial committee consisting of eminent academicians from prestigious institutions have been formed.

Achieve efficiency and transparency in spectrum management Spectrum to be utilised efficiently, economically, rationally and optimally. Considering the growing need of spectrum for communication services, there is a need to make adequate spectrum available. Appropriate frequency bands have historically been assigned to defence & others and efforts would be made towards relocating them so as to have optimal utilisation of spectrum. Compensation for relocation may be provided out of spectrum fee and revenue share levied by Government To promote indigenous telecom equipment manufacture for both domestic use and export To take necessary steps so as to facilitate expeditious approvals for right-of-way clearances to all service providers In order to achieve the above, TRAI has undertaken consultations on the following major issues during the year 2010-11: Spectrum Management and Licensing Framework Efficient Utilization of Numbering Resources Comprehensive approach to tackle unsolicited commercial communications National Broadband Plan

(F)
84.

IMPLEMENTATION OF NATIONAL TELECOM POLICY (NTP)

The NTP 1999 inter-alia envisaged the following: Availability of affordable and effective communications for the citizens Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the countrys economy; Encourage development of telecommunication facilities in remote, hilly and tribal areas of the country. Strengthen research and development efforts in the country and provide an impetus to build world-class manufacturing capabilities

85.

(i)

(ii)

(iii)

(iv)

Annual Report 2010-11 75

(v)

Telecom Equipment Manufacturing Policy Telecommunications Infrastructure Policy

(vi)

(G) QUALITY OF SERVICE (QOS)

86. The Authority, in exercise of its functions under Section 11 (1) (b) (v) of the TRAI Act, has prescribed the Quality of Service standards for Basic Telephone Service (wireline), Cellular Mobile Telephone Service and Broadband Service. For effectively ensuring the compliance of the QoS regulations with respect to the benchmarks for various parameters prescribed by TRAI, following steps are taken: Objective Assessment of QOS through an Independent Agency TRAI is closely monitoring the performance of Service Providers against the Quality of Service benchmarks laid down for various parameters in the regulations through Quarterly Performance Monitoring Reports (PMRs) and monthly Congestion Reports received from the service providers service area wise. With a view to check the authenticity of the information reported by the Basic, Cellular Mobile Telephone and Broadband Service Providers and to ascertain customer perception of quality of service, TRAI engaged independent agencies namely M/s IMRB International, M/s VOICE,M/s TCIL and M/s Market Pulse for conducting (1) 89.

(i)

an objective assessment of the quality of service provided by Basic, Cellular Mobile Telephone Service and Broadband Service Providers and (2) subjective customer satisfaction surveys for assessing the customers perception of the service and also to assess the implementation and effectiveness of Telecom Consumers Protection and Redressal of Grievances Regulations, 2007 on zonal basis. These agencies assess the quality of service through live measurement, drive test, verification of the records, through test calls and check back with customers. The results of these audit and survey reports and also the PMR reports are widely published for public/ stakeholders knowledge through TRAI websites and through newspapers. Further, in accordance with Telecom Consumers Protection and Redressal of Grievances Regulations, 2007 and subsequent instructions thereupon, the complaints booked with call centres, nodal officers and appellate authorities of Service Providers are monitored. The matters of concern arising out of Quality of Service monitoring, audit and survey are taken up with service providers. Transparency in billing through audits of the service providers billing system To bring transparency in billing, the TRAI has through Quality of Service (Code of Practice for Metering & Billing Accuracy) Regulations, 2006 has prescribed a Code of Practice for Metering and Billing Accuracy, which every service provider

87.

88.

(ii)

90.

76 Annual Report 2010-11

has to comply with. These regulations also mandate the service providers, to get their metering and billing system audited every year through any one of the auditor from the panel notified by TRAI and to submit to TRAI audit report thereon by 30th June of every year. The service providers are also required to submit to TRAI action taken report on the inadequacies, if any, pointed out by the auditor by 30th September of every year. In addition to this, various customer complaints relating to VAS provisioning and wrong billing are forwarded to Audit agencies for verification during audit and corrective actions thereupon. The systemic deficiencies observed during audit are to be corrected in a time bound manner. The audit of the metering and billing system is in operation since year 200607 and this has helped the service providers to improve their system processes in billing and reduced incidences of consumer complaints. 91. TRAI has also taken the following measures for protecting the interest of consumers:

of The Telecom Commercial Communications Customer Preference Regulations, 2010, registration of telemarketers has started on web portal www.nccptrai.gov.in from 15th January, 2011 and registration of customer preference on National Customer Preference Registry (NCPR) has started from 10th February, 2011. 93. The main features of The Telecom Commercial Communications Customer Preference Regulations, 2010 are as under: Option to customer to exercise his preference A simple and easy procedure for exercising option by the customer Easy registration of the telemarketer with effective identification Sharing of National Customer Preference Register with service providers and telemarketers so that telephone database can be effectively scrubbed before initiating telemarketing activities. Filtering and auto-blocking of calls and SMS to customers according to their options, if any Disconnection of telecom resources of defaulting telemarketers and blacklisting to ensure that they do not get any telecom resources from any other access provider Adequate provision to effectively implement the provisions of the Regulations

(i)

(ii)

(iii)

(iv)

(v) (i) The Telecom Commercial Communications Customer Preference Regulations, 2010 (vi) 92. TRAI initiated consultation process in May 2010 to curb the unsolicited Commercial Communications. After extensive discussions with all stakeholders, TRAI issued The Telecom Commercial Communications Customer Preference Regulations 2010 on 1 st December 2010. As per the provisions

(vii)

Annual Report 2010-11 77

94.

These Regulations provide a wide choice to the customer. He may choose to be under the fully blocked category which is akin to the Do Not Call Registry under the previous Regulations or he may choose the partially blocked category, in which case he will receive SMSs in the category/categories chosen by him. Mobile Number Portability Based on the guidelines on Mobile Number Portability issued by the Government, TRAI had issued Mobile Number Portability (MNP) Regulations in 2009. During the year 2010-11, TRAI continued its effort in this direction and the MNP services started in Haryana Licensed service area with effect from 25th November 2010 and in the rest of the country from 20th January 2011. Accordingly, the Telecommunications Mobile Number Portability (amendments) Regulations were issued. Further due to security reasons, the timelines in the regulation 10 of the MNP Regulations for the Donor operator to accept or reject the porting request has been increased from 24 hours to 4 working days. This has made the total porting time from 4 days to 7 working days in all the service areas other than Assam, J&K and North-East service area where it will be 15 working days. As per the data reported by the Service Providers, by the end of March 2011 about 64.22 Lakh subscribers have submitted their requests to different service providers for porting their mobile number.

(H) UNIVERSAL SERVICE OBLIGATION (USO)

96. In its recommendations on Spectrum Management and Licensing Framework dated 11th May,2010 TRAI has opined that the present roll out obligations are very lenient and are urban centric. The roll out obligations prescribed in the licence does not carry any condition regarding rural coverage and the service providers are mandated to provide coverage only in the district headquarters or major towns. The result is that even 15 years after the introduction of mobile service in the country, the rural teledensity is still below 25. Spectrum is a scarce resource and the service providers are expected to use it optimally and provide coverage and service in the entire Service area including the rural areas. However, experience reveals the picture to be otherwise. Though, 6-7 operators have been licensed for more than 5 years, most of them are yet to cover a large number of villages. The USO Fund is also not the answer as since June, 2007, when it launched the scheme of providing subsidy for installation of towers and providing mobile service in the rural and remote areas, only 6956 towers had been commissioned till 31.12.09. Keeping its objective of coverage of all the villages/habitations with a population of 500 and above within the next three years, the Authority in its recommendations adopted two-fold

(ii) 95.

97.

78 Annual Report 2010-11

approach to this challenge. One segment of this approach is to impose a full service obligation on the service providers for coverage of Habitations having a population of more than 2000 in a phased manner. Further, in order to facilitate the coverage of smaller habitations too, TRAI recommended that those licensees who have covered 50% of the habitations with a population of 500-2000 be given a reduction of 0.5% in the annual licence fee and those licensees who have covered 100% (90% & above to be treated as 100%) of the habitations with a population of 500-2000 should be given a 2% discount in the annual licence fee. This discount will be given from the licensees contribution towards the Universal Service Obligation Fund. 98. Further TRAI recommended that Universal Service Obligation fund should be utilised to provide broadband to all the villages having a population of more than 1000 to start with and later extend the same to all habitations having a population of 500 and above. Accordingly, in its recommendations on National Broadband Plan of December 2010, TRAI recommended that the USO fund should be utilised to lay optical fibre cable from Block Head Quarters (BHQ) to villages so as to fulfil the backhaul bandwidth requirement for provision of broadband in the rural areas. To implement the laying of OFC in a time bound manner, TRAI recommended for formation of

National Optical Fibre Agency (NOFA) and State Optical Fibre Agency (SOFA). 99. In its consultation papers on Issues related to Telecommunications Infrastructure Policy dated 16 th January, 2011, TRAI again deliberated on the subject of measures to promote telecom services in the rural areas. In its recommendations on Recommendations on Issues related to Telecommunications Infrastructure Policy issued in April 2011, it recommended:In future, application of USO fund should be restricted to i. Provision of telecommunication facility in habitations having a population of less than 500; and To lay optical fibre cable from District to Block head quarters and Block headquarters to villages so as to fulfil the backhaul bandwidth requirement for the provision of broadband and facilitate broadband growth in the rural areas. Any other use, if a commitment has already been agreed upon.

a.

ii.

iii.

b.

Applications like e-Health, e-Banking, eCommerce, e-Education, e-Governance, e-Entertainment etc. are required to be developed and customized for the local needs. The installation of towers and related equipment in rural areas serves the purpose of local population and to some Annual Report 2010-11 79

c.

extent business organisations. Hence the requirement for land conversion (around 400 Square metre of land) for setting up tower in rural areas by the telecom service providers should be dispensed with. d. State Electricity Boards should provide power supply to rural BTSs on priority basis.

Consumer Education 100. In January 2001, TRAI issued a Regulation formalizing the mode of its interaction with Consumer Organizations and NGOs related with telecom functions. This regulation provides the modalities for free registration of NGOs and Consumer Organizations with TRAI to enable twoway interaction on a sustainable basis. The registered Consumer Organizations/NGOs are kept informed about the developments by providing them with consultation papers, involving them in the consultation process and arranging their meetings with the Authority. The consumer groups and NGOs contribute to the policy formulation process of TRAI by bringing important consumer concerns to the notice of TRAI. At the end of March 2011, there were 41 consumer organizations registered with TRAI from all over the country. 101. Though TRAI is not mandated to resolve individual consumer complaints, it takes up such complaints if they relate to systemic problems / shortcomings. Complaints received in TRAI also help

gauge the performance of the sector. Based on such complaints, the Authority has addressed a number of issues, by issuing suitable directions, orders and regulations to protect the interests of consumers of telecom sector. It is important that consumers are aware of these so that their right and privileges can be effectively safeguarded. Focused on consumer education and capacity building of Consumer Advocacy Groups (CAGs), the Telecom Regulatory Authority organises workshops in different parts of the country. The service providers are also invited to these workshops so that they also become aware of these regulations and other steps initiated by TRAI to protect the interest of consumers, redressal of their grievances and offering qualitative services. 102. During the year 2010-11, TRAI conducted five regional workshops 1st at Bangalore on 4.8.2010, 2nd at Kolkata on 5.2.2011, 3 rd at Mumbai on 17.2.2011, 4th at Lucknow on 10.3.2011 and 5th at Shillong on 15.3.2011. Earlier in May 2010, the Authority held a special meeting of Chief Executive of Service Providers and CAGs to discuss issues such as transparency in tariff orders, problem of prepaid subscribers, and effective grievance redressal at call centre etc. which are of primary concern to the consumers and the CAGs. Annual meeting Consumer Advocacy Groups registered with TRAI has also been conducted at Chennai on 17.12.2010.

80 Annual Report 2010-11

Annual Report 2010-11 81

103. Authority approved holding of 100 District/Block level Consumer Education Workshops during the year 2010-11 by the consumer Advocacy Groups (CAGs) registered with TRAI, out of which they have organized 72 workshops in different parts of the country. In order to include Consumer Advocacy Groups from each zone and Internet Service Providers Association of India in the Committee for Utilisation of Consumer Education and Protection Fund (CUTCEF), Telecommunication Consumer Education and Protection Fund Regulations have been amended and notified on 7th March 2011. The CUTCEF has been accordingly reconstituted on 24th March 2011. 104. From January 2011, monthly News letter conveying important activities/

initiation taken by the Authority in telecom sector are being circulated to all registered CAGs. TRAI has been issuing various Regulations and Orders to protect the interests of consumers of telecom services from time to time. A handbook containing some important Regulations, directions and orders was compiled by the Authority for information of all stakeholders and this compilation is available in the website of TRAI. International Relations 105. TRAIs activities in International cooperation, MOUs with Regulators / Organisations of other countries, participation in International events and visits of International delegations are discussed in the following paragraphs.

82 Annual Report 2010-11

(i) (a)

Participation in International events TRAI-MIC (Ministry of Internal Affairs & Communications, Japan) Policy Dialogue took place in TRAI on 6th April 2010 for sharing the experience and expertise in telecom regulation and competition policy. The Japanese delegation was headed by Mr. Sakurai, Director General, Telecommunication Bureau, MIC Japan.

(b)

Post International Telecommunication Union (ITU) WTDC-2010 (World Telecommunication Development Conference), TRAI held a meeting on 28th May 2010 with Ambassador Philip L. Verveer, US Coordinator for International Communications and Information Policy and Mr. Julius Genachowski, Federal Communications Commission (FCC) Chairman. Top executive of telecom and broadcasting

Annual Report 2010-11 83

sectors were also present in the meeting. (c) Asia-Pacific Telecommunity (APT)s South Asian Telecommunication Regulators Council (SATRC) Working Group meeting on Policy and Regulation took place in TRAI premises from 9 th to 10 th August 2010. The meeting was attended by representatives from SATRCs member countries viz. Afghanistan, Bangladesh, Bhutan, Iran, Maldives, Nepal, Pakistan and Sri Lanka. A delegation led by Chairman, TRAI comprising of Member and Senior

officers of TRAI visited USA from 23rd to 27th August 2010. Meetings were held at FCC, US Department of State at Washington. Meetings were also held with US Industry and investors at New York and Boston during the period. (e) India-Japan Joint Meeting was held at Tokyo, Japan from 27th September to 1st October 2010. A delegation led by Chairman TRAI, comprising of Member, Senior Officers of TRAI, representatives from Indian Telecom & Broadcasting Industry and Academic Institutions, participated in the same.

(d)

84 Annual Report 2010-11

(f)

TRAI participated in the 10 th Global Symposium for Regulators, which was held from 9th to 12th November 2010 at Dakar, Senegal. A meeting between TRAI and MTN, the largest Cellular operator in South/ Southern Africa was held in New Delhi on 24th November 2010. Visits of International Delegations to TRAI: ETA Delegation Six member delegation from Ethiopian Telecommunication Agency (ETA), Ethiopia visited TRAI on 12th April 2010 on study visit.

(TCRA) visited TRAI for five days study visit from 19th to 23rd July 2010. e) Executives from MTN, South Africa A meeting with MTN Executives was chaired by Secretary TRAI on 24 th November 2010. The meeting was requested by them to get an insight into the telecom policies and the regulatory environment in India. f) USIBC Delegation A delegation from U.S.- India Business Council (USIBC) comprising of Executives from top ICT companies and Telecommunications Industry Association visited TRAI on 6 th December 2010 for a meeting with the Authority.

(g)

(ii)

a)

b)

Indonesian Delegation Mr. Subagio, Director of Government Communication Institution and a Seven member delegation from Ministry of Communication and Information, Indonesia visited TRAI on 30th April 2010 to study the communication, its maintenance and broadcasting system in India.

c)

UAE H. E. Mohamed Nasser Al Ghanim, Director General, Telecommunication Regulatory Authority (TRA), UAE visited TRAI on 25th June 2010 for bilateral discussions with Chairman TRAI.

g)

USA Ambassador Phillip Verveer, US Coordinator for International Communications and information Policy and Deputy Assistant Secretary of State with their member delegations visited to TRAI on 09.12.2010 for bilateral discussions with the Authority

d)

Tanzania Mrs Mary Dotto, Frequency Management Engineer, Tanzania Communications Regulatory Authority

Annual Report 2010-11 85

h)

Zambia A delegation led by Director General, Zambia Information and Communications Technology Authority (ZICTA) visited TRAI on 25th January 2011 for bilateral discussions with the Authority.

j)

USIBC A delegation from U.S.-India Business Council (USIBC) visited to TRAI on 21st March 2011 for a meeting with the Authority.

i)

Japan Mr. Tetsuo YAMAKAWA, Vice-Minister for Policy Coordination, Ministry of Internal Affairs and Communications visited to TRAI on 22.02.2011 for bilateral discussions.

86 Annual Report 2010-11

(iii) Memorandum of Understanding between TRAI and other Authorities / Organizations

106. During the year 2010-11, Memorandum of Understanding (MOU) was signed between Anatel, Brazil and TRAI on 26th May 2010, during ITU WTDC-10 meeting held at Hyderabad. The MoU was signed by H. E. Ambassador Ronaldo Sardenberg, President, Anatel

and Dr. J.S. Sarma, Chairman TRAI. Besides this, MOU has already been signed with: (a) (b) (c) (d) NTRA, Egypt EETT, Greece MIC, Japan Stanford University, California, USA

Annual Report 2010-11 87

88 Annual Report 2010-11

PART-III FUNCTIONS OF TELECOM REGULATORY AUTHORITY OF INDIA IN RESPECT OF MATTERS SPECIFIED IN SECTION 11 OF TELECOM REGULATORY AUTHORITY OF INDIA ACT

Annual Report 2010-11 89

90 Annual Report 2010-11

FUNCTIONS OF THE TELECOM REGULATORY AUTHORITY OF INDIA IN RESPECT OF MATTERS SPECIFIED IN SECTION 11 OF THE TRAI ACT
1. The Authority, in pursuance of achieving the objectives of ensuring growth of industry and protecting interest of consumers has made several Recommendations either suo moto or on matters referred to it by the Government; notified various Regulations to carry out purposes of the Act; taken action to enforce licence terms and conditions; and initiated work on several other issues. By discharging various recommendatory & regulatory functions, TRAI has contributed to growth of telecom services including the broadcasting and cable TV services in terms of increased number of consumers and a vast network providing telecom services across the length and breadth of the country. These continued measures have also resulted in overall benefits to the consumer in terms of choice of services, reduced tariff of telecom service, better quality of service etc. Some of the specific functions carried out by TRAI in respect of various matters specified in Section 11 of the TRAI Act are given below.

A)

TELECOMMUNICATION RATES BOTH WITHIN INDIA AND OUTSIDE INDIA INCLUDING THE RATES AT WHICH MESSAGES SHALL BE TRANSMITTED TO ANY COUNTRY OUTSIDE INDIA
Section 11 (2) of the TRAI Act, 1997 as amended by TRAI (Amendment) Act 2000 empowers the Authority to notify in the Official Gazette the rates at which Telecommunication Services within India and outside India shall be provided. Further, the function of specifying norms for fixation of rates for Pay Channels as well as fixation of rates for Cable

2.

Annual Report 2010-11 91

Services is also assigned to TRAI. Details of action taken by TRAI in Telecom Sector and Broadcasting & Cable Sector during 2010-11 are discussed in the following paragraphs. 3. Section 11(2) of the Telecom Regulatory Authority of India Act, 1997 as amended by TRAI (Amendment) Act, 2000, empowers the Authority to notify in the Official Gazette the rates at which telecommunication services within India and outside India shall be provided, including the rates at which the messages shall be transmitted to any country outside India. It also provides that the Authority may notify different rates for different persons or class of persons for similar telecommunication services. Besides specifying the tariff regime applicable to various services, TRAI is also required to ensure that tariffs prevailing in the market are consistent with the specified tariff regime. For this purpose, the Authority monitors the rates at which the service providers provide the various telecom services. Presently, tariff for telecom services is under forbearance, except rental, free call allowances and local call tariffs in the case of fixed line rural subscribers, roaming services in mobile telephony and for leased circuit. Service Providers have the flexibility to offer any tariff, subject to certain regulatory principles, including IUC compliance. As per the Telecommunication Tariff Order dated 9.3.1999, forbearance means where the Authority have, for the time being 5.

forborne from fixing tariff for any telecommunication service or part thereof and a Service Provider shall be at liberty to fix any tariff for such telecommunication services. The Authoritys Telecommunication Tariff Order (TTO) 1999, implemented w.e.f. 1st April 1999 has been used as an instrument to achieve regulatory goals and to promote competition in the telecom sector, providing protection to consumer interests and to serve as a signal to promote investment. The per second pulse tariff schemes introduced in 2009-10 by the mobile service providers became a regular feature of tariff offers this year. Almost all service providers have on offers at least one per second tariff option in both the postpaid and prepaid segments. Some service providers have even offered per second plans with lifetime validity. The subscribers thus continued to enjoy low tariffs in the form of a variety of discounted offers in all service segments across all service areas and service providers. The year was characterized by consolidation in price trends after the initial intensive competitive phase arising out of entry of the new players in GSM mobile segment. However, the implementation of Mobile Number Portability (MNP) encouraged the telecom service providers to introduce innovative tariff offers to attract subscribers from other telecom service providers, and also to come up with lower tariff rates and other attractive

4.

6.

92 Annual Report 2010-11

offers for their existing subscribers as well. All these factors resulted in the mobile services becoming more affordable and expanding the already wide mobile subscriber base. 7. The Authority on 3rd December 2010 directed the Cellular Mobile Telephone Service Providers and Unified Access Service Providers to treat the SMS sent to short code number 1900 requesting for unique porting cord for the purpose of Mobile Number Portability, as ordinary SMS for the purpose of charging and the rate for such SMS shall not exceed the tariff applicable for ordinary SMS under the tariff plan opted by the subscriber. TRAI continued to monitor the retail tariffs on a regular basis; as per the reporting requirements, the service providers have been filing tariff with TRAI within seven days of implementation. Thousands of tariffs are filed with TRAI under this requirement and they are monitored by the TRAI. Though the service providers have been mandated to implement the tariff only after conducting a self check, TRAI examines the tariffs filed as well as those displayed in public domain by service providers with a view to ensure their consistency with regulatory guidelines. Detailed analysis is also being carried out after obtaining the revenue and subscriber data from all the operators on quarterly basis. The results of the analysis are published through quarterly 10.

reports on The Indian Telecom Services Performance Indicators. These periodical reports provide an update on growth trend for the telecom services in the country and present a broad perspective on the telecom services to serve as reference documents for various stakeholders. Besides this, the representations and complaints received from consumers and their organizations as well as media reports also give indication of possible inconsistencies of the prevailing tariff in the market with the regulatory guidelines. These complaints are examined in detail to find out the corrective measures in this regard. A general advisory was issued to all access service providers under the provision of TTO-1999 regarding prohibition of discriminatory tariff. Through this advisory, access service providers were advised to comply with the provisions in the context of special tariffs offers exclusively for MNP subscribers and immediately withdraw any tariff in operation which is inconsistent with the provisions of said TTO. During the period 2010-11, in the Broadcasting & Cable Sector, two Consultation Papers relating to tariff were issued. This consultation process culminated in issue of the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order 2010 dated 21st July 2010. The details of the Tariff Order

8.

11.

9.

Annual Report 2010-11 93

have already been discussed in Part II of this Report.

v.

B)

RECOMMENDATIONS ON (I) THE NEED AND TIMING OF THE NEW SERVICE PROVIDERS; (II) THE TERMS AND CONDITIONS OF LICENSE TO A NEW SERVICE PROVIDER; AND (III) REVOCATION OF LICENCE FOR NONCOMPLIANCE OF TERMS AND CONDITIONS OF LICENCE
Under Section 11 (1) (a) of the TRAI Act 1997, the Authority is required to make recommendations either suo moto or on a request from the licensor, i.e., Department of Telecommunications or Ministry of Information & Broadcasting in the case of Broadcasting and Cable Services. Recommendations given by TRAI to Government during 2010-11 are given below. i. Revised Recommendations dated 14th April 2010 on issues relating to Mobile TV services Recommendations dated 11 th May 2010 on Spectrum Management and Licensing Framework Recommendations dated 30 th June 2010 on Foreign Direct Investment Limits for Broadcasting Sector Recommendations dated 22 nd July 2010 on Issues relating to Uplinking/Downlinking of Television channels in India

Recommendations dated 5 th August 2010 on Implementation of Digital Addressable Cable TV Systems in India Recommendations dated 20 th August 2010 on Efficient Utilization of Numbering Resources Recommendations dated 8 th December 2010 on National Broadband Plan Recommendations dated 18 th November and 22nd December 2010 on Status of Roll Out Obligations in respect of Licenses issued from December 2006 onwards Recommendations dated 8 th February 2011 on 2010 Value of Spectrum in 1800 MHz band Revised Recommendations dated 9th February 2011, on 3rd phase of Private FM Radio Broadcasting. Revised Recommendations dated 22 nd February 2011 on policy issues relating to Uplinking / Downlinking of TV channels in India Revised Recommendations dated 22 nd February 2011 on Implementation of Digital Addressable Cable TV Systems in India

vi.

vii.

12.

viii.

ix.

x.

xi. ii.

iii.

xii.

iv.

13.

Following recommendations are outcome of the consultation process taken during the period 2010-11:

94 Annual Report 2010-11

(i)

Recommendations on Telecom Equipment Manufacturing Policy Recommendations on Approach towards Green Telecommunications Recommendations on Te l e c o m m u n i c a t i o n s Infrastructure Policy

(ii)

(iii)

14.

The details of these Recommendations have already been discussed in Part II of this Report.

C)

ENSURING TECHNICAL COMPATIBILITY AND EFFECTIVE INTER-CONNECTION

The steps taken by TRAI for ensuring Technical Compatibility and effective interconnection in respect of Telecom and Broadcasting & Cable Sectors are enumerated below. Interconnection is the lifeline of telecommunications. Interconnection allows subscribers, services and networks of one service provider to be accessed by subscribers, services and networks of the other service providers. Interconnection Usage Charge (IUC) are charges payable by one telecom operator to the other for use of the latters network either for originating, terminating or transiting/carrying a call. The regulatory framework for interconnection was first established through the Regulation issued by TRAI in May 1999, titled The Telecommunication Interconnection (Charges on Revenue Sharing)

15.

16.

Regulation 1999 specifying certain principles for determining interconnection charges and revenue sharing arrangements. Subsequently, TRAI has considered it important to specify an IUC regime that would give greater certainty to the Inter-operator settlements and facilitate interconnection agreements. The Authority notified an Interconnection Usage Charges (IUC) Regulation on 24th January 2003, which contained inter alia charges for origination, transit and termination of calls in a Multi-Operator environment. This IUC Regulation has introduced the regime of Calling Party Pays (CPP) which is perhaps the biggest factor in growth of telecom services in India. By introduction of CPP regime all incoming calls could be received free of charge. This regulation was superseded by regulation dated 29th October 2003. In this regulation TRAI prescribed identical termination charges for all types of calls and therefore simplified the implementation of the regime. The IUC amendment that became effective from 1 st April 2009 reduced the domestic termination to 20 paise per minute and increased international termination to 40 paise per minute. 17. The termination charges in India are the lowest in the world. The cost based IUC Regime introduced by TRAI has helped the service providers for downwards revision in their respective tariffs from time to time in the most competitive manner which has resulted in exponential growth in the telecom

Annual Report 2010-11 95

sector. As a result of sustained efforts of TRAI, the Indian telecom sector has grown to become the worlds second largest market after China. It has surpassed the number of connection in US in March, 2008. The number of lines has grown from 14.88 million in 1997 to 846.32 million in March, 2011 18. During the year, to review the IUC regulation, TRAI issued a preconsultation paper on 24th December 2010 wherein the Service Providers were requested to furnish information on various aspects of IUC. Taking into consideration the inputs provided by these Service Providers and Associations, a detailed consultation paper was issued on 27th April 2011 and an addendum thereto on 29 th April 2011. With a view to ensure compliance of the provisions of Schedule IV of IUC Regulations, TRAI has also issued Direction dated 22nd February 2010 to M/s Bharti Airtel Ltd. and M/s Idea Cellular Ltd. wherein, the Authority directed them to stop applying discriminatory termination charges on SMS. TRAI sent recommendations on Provision of Calling Cards by Long Distance Operators to the DOT on 20th August 2008. TRAI had recommended that License conditions of the NLD and ILD license may be amended to allow NLDOs and ILDOs to have direct access to consumers, through calling cards for provision of national and international voice telephony services, respectively.

These recommendations were accepted by the DOT in August 2009 and licence conditions were appropriately modified. Subsequent to acceptance of TRAIs recommendation by DOT and simultaneous resultant amendment in the related clauses of the NLD and ILD Licences agreement, NLDOs and ILDO have now become eligible to issue calling cards for national and international calls respectively. TRAI issued draft Amendment to the Intelligent Network Services in Multi Operator Multi Service Scenario Regulations, 2006 on 12.10.2010 so that service Providers can enter into agreement with all other service providers in a time bound manner for the comments of stakeholders. 20. Government of India (Ministry of Information and Broadcasting) announced Policy guidelines for providing Headend-in-the-Sky (HITS) service in India on 26 Nov, 2009. Pursuant to the said announcement of HITS policy, the Ministry of Information and Broadcasting requested TRAI, vide its letter dated 10th December, 2009, to revisit the relevant interconnection regulations, tariff orders, etc., in order to take a view on whether there was any amendment required in them in the interest of the service so that the benefits of the policy can be fully achieved. On the basis of the said request, TRAI initiated a consultation process on the subject Interconnection and Tariff Issues related to HITS services.

19.

96 Annual Report 2010-11

21.

The consultation paper for the purpose was issued on 6 th April, 2010. The consultation paper had grouped the issues posed for consultation into two broad categories, namely, interconnection issues and tariff issues. Issues relating to tariff have been addressed separately. Considering all the aspects of the matter including that emerging from the consultation process, the Authority amended the interconnection regulation by amending the definition of the HITS operator to provide for use of both C and Ku band by these operators. Since the policy guidelines issued by the Ministry of Information and Broadcasting permit HITS operator to distribute multi channel TV programmes on its own cable network (after first downlinking the signals at its terrestrial receiving station) and also provides for HITS operator to be a passive infrastructure facility provider to other MSO or consortium of cable operators, the

scope of the existing definitions of HITS operator and multi system operator have been appropriately enlarged. Accordingly, The Telecommunication (Broadcasting and Cable Service) Interconnection (Sixth Amendment) Regulation was issued on 30th July 2010.

(D) REGULATING ARRANGEMENT AMONGST SERVICE PROVIDERS OF SHARING THEIR REVENUE DERIVED FROM PROVIDING TELECOMMUNICATION SERVICE.
22. In the case of normal calls the originating service provider bills the customer and collects revenue. The call, however, involves work done in the network of the terminating service provider and the long distance service provider in carrying the call if it is a long distance call. The originating service provider would have to share the revenue with other service providers who help in completion of the call. For a fair cost-based distribution TRAI has

Existing Interconnection Usage Charge Origination Charge Termination Charge Under Forbearance Uniform for all types of domestic calls viz fixed to fixed, fixed to mobile, mobile to fixed and mobile to mobile 20 Paise / minute Same as 2G voice calls 40 paise per minute Ceiling of Rs 0.65 per minute Under Forbearance. Under forbearance. However, these charges should be transparent, reciprocal and non-discriminatory.

Termination charge for 3G voice calls Termination charge for incoming international calls Domestic Carriage charge International Carriage Charge IUC for SMS

Annual Report 2010-11 97

established an IUC regime that governs inter-operator payments. The table at the previous page indicates these charges: 23. To review the IUC Regulations, TRAI issued a pre-consultation paper on 24th December 2010 wherein the service providers were requested to furnish information on various aspects of IUC. Taking into consideration the inputs provided by these Service Providers and Associations, a detailed consultation paper was issued on 27th April 2011 and an addendum thereto on 29 th April 2011. TRAI issued Consultation Paper REVENUE SHARING ARRANGEMENT FOR INTELLIGENT NETWORK SERVICES on 03.11.10. Through this consultation paper the TRAI aimed to involve all the stakeholders to deliberate on the complex issue of sharing of revenue from Intelligent Network (IN) based services among the interconnecting service providers and assist TRAI in arriving at an arrangement by which work done of interconnecting service providers may be compensated. 26.

DLC/local lead in a non-discriminatory manner, TRAI issued DLC Regulations on 14th September 2007. These regulations cover DLC and local Lead provided on any media i.e. copper, fiber, wireless etc. and using any transmission technology. These regulations make it obligatory for all service providers who have the capacity of copper, fiber or wireless, and who have been allowed under the licence to provide DLC, to share it with other service providers. From the analysis of the reports received it is observed that since the release of DLC regulations, the provision of DLCs / local leads have been streamlined. Timely provision of number of E1 ports have been continuously monitored by TRAI during the year. Quarterly compliance of direction which require timely provision of E1 ports have been sought from service providers. In case of service providers were not able to provide E1 ports timely, they have furnished reasons which were verified from seeker service providers. Pending E1 was cross verified from congestion report furnished by service providersfor various locations. Service providers have been asked to reconcile Point of Interconnection (POI) congestion with pending E1 ports at various locations and to take appropriate action.

24.

E)

TIME PERIOD FOR PROVIDING LOCAL AND LONG DISTANCE CIRCUITS OF T E L E C O M M U N I C AT I O N BETWEEN DIFFERENT SERVICE PROVIDERS
To provide a framework to ensure transparency, predictability and reasonableness and allow provision of

F)

25.

ENSURING COMPLIANCE OF THE TERMS AND CONDITIONS OF LICENSE

This function is discharged by TRAI through a multi pronged approach. One

27.

98 Annual Report 2010-11

of these approaches is through analysing reports received from the Service Providers. Another approach is through feedback / representations received from consumers / consumer organizations, experts etc. In certain cases, TRAI on its own initiative has taken action for ensuring compliance of terms and conditions of license. Brief details of action taken by TRAI are elaborated below. 28. Through the direction dated 3 rd December 2010, the Authority directed the Cellular Mobile Telephone Service Providers and Unified Access Service Providers to treat the SMS sent to short code number 1900 requesting for Unique Porting Code for the purpose of Mobile Number Portability, as ordinary SMS for the purpose of charging and the rate for such SMS shall not exceed the tariff applicable for ordinary SMS under the tariff plan opted by the subscriber. TRAI issued direction dated 22 nd February 2010 to M/s Bharti Airtel Ltd. and M/s Idea Cellular Ltd. regarding application of Interconnection Usage Charges on Short Messaging Services. With a view to ensure compliance of provisions of Schedule IV of Telecommunications Interconnection Usage Charges Regulations, 2003 dated 29th October 2003, the Authority issued the direction to stop applying discriminatory termination charges on SMS. Tariff filed by the various Services Providers are examined in TRAI from

technical and licensing angle to ensure that services offered by the Service Providers are in compliance with the licensing conditions.

G)

Steps taken to protect the Interest of the Consumers of Telecommunications Services

TRAI had issued the Quality of Service (Code of Practice for Metering and Billing Accuracy) Regulation 2006 on 21st March, 2006. This was with a view to (i) bring uniformity and transparency in the procedures being followed by service providers with regard to metering and billing; (ii) prescribe standards relating to accuracy of measurement, reliability of billing; (iii) measure the accuracy of billing provided by the Service Providers from time to time and to compare them with the norms so as to assess the level of performance; (iv) minimize the incidences of billing complaints; (v) and to protect the interest of consumers of telecommunication services, The Regulation mandates the service providers to arrange audit of their Metering and Billing System on an annual basis through any one of the auditors notified by TRAI and to furnish to TRAI an audit certificate thereof not later than 30th June of every year. The Regulation also provides that the service providers have to take corrective action on the inadequacies, if any, pointed out by the Agency in the Certificate and to file with TRAI an Action Taken Report thereon not later than 30th September of every financial year. Various customer complaints

31.

29.

30.

Annual Report 2010-11 99

relating to VAS provisioning and wrong billing are also forwarded to Audit agencies for verification during audit and corrective actions thereupon. 32. In accordance with Telecom Consumers Protection and Redressal of Grievances Regulations, 2007 and subsequent instructions thereupon, the complaints booked with call centres, nodal officers and appellate authorities of Service Providers are monitored. The matters of concern arising out of Quality of Service monitoring, audit and survey are taken up with service providers. TRAI had initiated consultation process in May 2010 to curb the unsolicited Commercial Communications. After extensive discussions with all stakeholders, TRAI issued The Telecom Commercial Communications Customer Preference Regulations 2010 on 1st December 2010. The details of the Regulations have been discussed in Part II of this report. Further, TRAI continued its effort in the direction of launching the Mobile Number Portability services and issued Telecommunications Mobile Number Portability (amendments) Regulations. The services for MNP were started in Haryana Licensed service area with effect from 25th November 2010 and in the rest of the country from 20th January 2011. The details of this amendment of Regulation are discussed in Part II of this Report. In January 2001, TRAI issued a Regulation formalizing the mode of its

interaction with Consumer Organizations and NGOs related with telecom functions. This regulation provides the modalities for free registration of NGOs and Consumer Organizations with TRAI to enable twoway interaction on a sustainable basis. The registered Consumer Organizations/NGOs are kept informed about the developments by providing them with consultation papers, involving them in the consultation process and arranging their meetings with the Authority. The consumer groups and NGOs contribute to the policy formulation process of TRAI by bringing important consumer concerns to the notice of TRAI. At the end of March 2011, there were 41 consumer organizations registered with TRAI from all over the country. 35. Though TRAI is not mandated to resolve individual consumer complaints, it takes up such complaints if they relate to systemic problems / shortcomings. Complaints received in TRAI also help gauge the performance of the sector. Based on such complaints, the Authority has addressed a number of issues, by issuing suitable directions, orders and regulations to protect the interests of consumers of telecom sector. It is important that consumers are aware of these so that their right and privileges can be effectively safeguarded. Focused on consumer education and capacity building of Consumer Advocacy Groups (CAGs), the Telecom Regulatory Authority organises workshops in

33.

34.

100 Annual Report 2010-11

different parts of the country. The service providers are also invited to these workshops so that they also become aware of these regulations and other steps initiated by TRAI to protect the interest of consumers, redressal of their grievances and offering qualitative services. 36. During the year 2010-11, TRAI conducted five regional workshops 1st at Bangalore on 4.8.2010, 2nd at Kolkata on 5.2.2011, 3 rd at Mumbai on 17.2.2011, 4th at Lucknow on 10.3.2011 and 5th at Shillong on 15.3.2011. Earlier in May 2010, the Authority held a special meeting of Chief Executive of Service Providers and CAGs to discuss

issues such as transparency in tariff orders, problem of prepaid subscribers, and effective grievance redressal at call centre etc. which are of primary concern to the consumers and the CAGs. Annual meeting Consumer Advocacy Groups registered with TRAI has also been conducted at Chennai on 17.12.2010. 37. Authority approved holding of 100 District/Block level Consumer Education Workshops during the year 2010-11 by the consumer Advocacy Groups (CAGs) registered with TRAI, out of which they have organized 72 workshops in different parts of the country. In order to include Consumer Advocacy Groups

Annual Report 2010-11 101

from each zone and Internet Service Providers Association of India in the Committee for Utilisation of Consumer Education and Protection Fund (CUTCEF), Telecommunication Consumer Education and Protection Fund Regulations have been amended and notified on 7th March 2011. The CUTCEF has been accordingly reconstituted on 24th March 2011. 38. From January 2011, monthly News letter conveying important activities/ initiation taken by the Authority in telecom sector are being circulated to all registered CAGs. TRAI has been issuing various Regulations and Orders to protect the interests of consumers of telecom services from time to time. A handbook containing some important Regulations, directions and orders was compiled by the Authority for information of all stakeholders and this compilation is available in the website of TRAI.

certainty is important for formulation of appropriate business strategies, promoting competition and thereby giving customer the fruits of innovation. TRAI has carried out the job of increasing competition and easing entry of competitive service providers in all seriousness. Measures in the form of recommendations / regulations / tariff orders / directions etc have proved to be key for growth of the industry. 40. Gradual opening up of all segments of the telecommunications market has given rise to multiplicity of interconnections. In such a situation the types and number of interconnections become large making the interconnection scenario rather complex. The situation is further complicated by the number of licensees for each service within a service area. New entrants in telecommunications markets have little to offer in negotiations. To remove these barriers to competition, to pave the way for effective interconnection arrangements among various co-operating and competing service providers and provide greater certainty to the settlements among them, TRAI has time to time issued various regulations/ determinations/ directions that meet industrys expectations, reflect market conditions and support the overall objective of telecom growth in the country. To facilitate competition and promote efficiency in the operation of

H)

STEPS TAKEN TO FACILITATE COMPETITION AND PROMOTE EFFICIENCY IN THE OPERATION OF TELECOMMUNICATION SERVICES SO AS TO FACILITATE GROWTH IN SUCH SERVICES
TRAI has always endeavoured to establish policies that are contemporary, in tune with the state of development, simple and pragmatic. They have had desired impact on competition, infrastructure, revenue and customer welfare. It has been conscious of the fact that regulatory

39.

41.

102 Annual Report 2010-11

telecommunications and Broadcasting services TRAI issued the following Regulations during 2010-11. (i) The Telecommunication (Broadcasting and Cable Service) Interconnection (Sixth Amendment) Regulations, 2010 dated 30th July 2010 Telecommunication Mobile Number Portability (Second Amendment) Regulations, 2010 dated 24th November, 2010. The Telecom Commercial Communications Customer Preference Regulations, 2010 dated 1st December 2010

(ii)

subscribers. In addition to a-la-carte provisioning of channels, the operator can also offer bouquet of channels. The price of channels / bouquets to the subscribers at retail level has been kept under forbearance but there shall not be any increase in subscription charges for 6 months from the date of enrolment with the operator. An operator can specify monthly subscription not exceeding Rs 150/(excluding taxes) per month per subscriber for availing the services of the operator.

(iii)

J)

42.

The details of these Regulations have been discussed in Part II of this Report.

STEPS TAKEN TO ENSURE EFFECTIVE COMPLIANCE OF UNISVERSAL SERVICE OBLIGATION (USO)

TRAI has made various recommendations to promote universal service in telecommunications in the country. The ubiquitous service was aimed to be achieved through roll out obligations and through use of the Universal Services Obligation Fund (USOF). However, till date, USO schemes have met with limited success. To provide impetus to rural telephony, TRAI in its recommendations on Spectrum management and licensing framework of May 2010 and National Broadband Plan of December 2010, revisited the issue of penetration of mobile services and broadband in the rural areas. One of the major shifts stemming out of these recommendations is that the areas for utilization of the USO Fund have been

44.

I)

LEVY OF FEES AND OTHER CHARGES AT SUCH RATES AND IN RESPECT OF SUCH SERVICES AS MAY BE DETERMINED BY REGULATIONS
After a comprehensive review of the tariff for all the broadcasting services viz., analog cable TV services (non CAS) and digital addressable services such as CAS, DTH, IPTV and HITS, the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order, 2010 was issued on 21st July 2010. This tariff order covers all digital addressable systems such as DTH, HITS, IPTV, and digital addressable Cable TV. The Tariff Order provides for a-la-carte choice of channels to the

43.

Annual Report 2010-11 103

redefined. Some of these areas include laying of optical fibre up to BHQ level to provide backhaul for broadband in rural areas and providing coverage for habitations having population less than 500 persons.

issued from December 2006 onwards v. Recommendations dated 8 th February 2011 on The 2010 Value of Spectrum in 1800MHz band vi. Revised Recommendations dated 14th April 2010 on issues relating to Mobile TV services Recommendations dated 30 th June 2010 on Foreign Direct Investment Limits for Broadcasting Sector Recommendations dated 22 nd July 2010 on Issues relating to Uplinking/Downlinking of Television channels in India Recommendations dated 5 th August 2010 on Implementation of Digital Addressable Cable TV Systems in India Revised Recommendations dated 9th February 2011, on 3rd phase of Private FM Radio Broadcasting. Revised Recommendations dated 22 nd February 2011 on policy issues relating to Uplinking / Downlinking of TV channels in India Revised Recommendations dated 22 nd February 2011 on Implementation of Digital Addressable Cable TV Systems in India

K)

DETAILS OF ADVICE RENDERED TO THE CENTRAL GOVERNMENT IN THE MATTER RELATING TO DEVELOPMENT OF T E L E C O M M U N I C AT I O N TECHNOLOGY AND ANY OTHER MATTER RELATABLE IN T E L E C O M M U N I C AT I O N INDUSTRY IN GENERAL.
Details of advice tendered by TRAI to the Central Government in the matters relating to development of telecommunication and broadcasting cable sectors are given below i. Recommendations dated 11 th May 2010 on Spectrum Management and Licensing Framework Recommendations dated 20 th August 2010 on Efficient Utilization of Numbering Resources Recommendations dated 8 th December 2010 on National Broadband Plan

vii.

viii. 45.

ix.

x.

ii.

xi.

iii.

xii. iv. Recommendations dated 18 th November and 22 nd December 2010 on Status of Roll Out Obligations in respect of Licenses

104 Annual Report 2010-11

46.

Following recommendations are outcome of the consultation process taken during the period 2010-11: (i) Recommendations on Telecom Equipment Manufacturing Policy Recommendations on Approach towards Green Telecommunications Recommendations on Te l e c o m m u n i c a t i o n s Infrastructure Policy

49.

(ii)

(iii)

L)

MONITORING OF THE QUALITY OF SERVICES AND DETAILS OF PROMOTIONAL SURVEY OF SUCH SERVICES BY THE SERVICE PROVIDERS
TRAI monitors the performance of Basic and Cellular Mobile service against the benchmarks prescribed by TRAI through quarterly performance monitoring report (PMR) received from service providers. TRAI monitors the performance of Broadband service providers against the benchmarks prescribed by TRAI vide Regulation on Quality of Service of Broadband Service dated 6th October, 2006. The quarterly reports submitted by Broadband service providers are analyzed for assessing their performance with regard to the QOS benchmark. Wherever deficiencies in meeting the quality of service benchmark are noticed, the matter has been taken up with the concerned service provider for remedial action in a time bound basis.

TRAI notified Regulation on Quality of Service of Dial-up And Leased Line Internet Access Service in December, 2001, fixing benchmarks for Internet Dial-up Access that were required to be achieved by ISPs within 6 months. Accordingly, ISPs are required to comply with the benchmarks as per the QoS Regulations. TRAI receives quarterly Performance Monitoring Reports from ISPs and these are analyzed for assessing their performance with regard to Quality of Service benchmarks. TRAI is monitoring the level of congestion at the POI between various Service Providers on Monthly basis. This parameter signifies the ease with which a customer of one network is able to communicate with a customer of another network. This parameter also reflects as to how effective is the interconnection between two networks. The benchmark notified by TRAI in the QoS Regulations of July 2005 for this parameter is <0.5%. The POI Congestion Report analysis for the year 2010-11 shows that the performance of the CMSPs with respect to the congestion on POIs has improved as compared with the performance in March 2011. During the period Cellular Mobile Telephone Subscriber base has increased from 584.32 million in March 2010 to 811.59 million in March 2011. The number of POIs having congestion has decreased from 82 in March 2010 to 63 in March 2011.

50.

47.

48.

Annual Report 2010-11 105

106 Annual Report 2010-11

PART-IV ORGANISATIONAL MATTERS OF TELECOM REGULATORY AUTHORITY OF INDIA AND FINANCIAL PERFORMANCE

Annual Report 2010-11 107

108 Annual Report 2010-11

A) ORGANIZATIONAL MATTERS OF TELECOM REGULATORY AUTHORITY OF INDIA AND FINANCIAL PERFORMANCE

A) Organizational matters of Telecom Regulatory Authority of India
This section provides information on organizational matters of TRAI relating particularly to organization, funding, human resources covering the areas of recruitment, training and seminars and some general issues are detailed in the following paragraphs.

(a)
2.

ORGANISATION
The Telecom Regulatory Authority of India (Authority) is a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued. The Telecom

Annual Report 2010-11 109

Regulatory Authority of India was established under the Telecom Regulatory Authority of India Act, 1997 enacted on 28 March, 1997. The TRAI (Amendment) Act, 2000 led to reconstitution of the Authority. The Authority now consists of a Chairperson, and not more than two whole time members and not more than two-part time members, to be appointed by the Central Government. The head office of the Authority is at New Delhi.
th

development in TRAI as well as for enforcement of all the Regulations/ Directions/Orders issued by TRAI. Admn. & HRM and RE Division has the responsibility of management and control of activities of General Administration Section, Public Relation Section, RE Section, OL Section, MR Section and RTI Section. On Regulatory Enforcement front, it is responsible for enforcement of all Regulations/ Directions/Orders issued by TRAI.

(b)
3.

SECRETARIAT OF TRAI
The Authority functions with a Secretariat headed by Secretary. The Secretariat works through functional divisions, viz. Administration & Human Resources; Broadcasting & Cable Services; Broadband & Policy Analysis; Consumer Affairs; International Relation; Special Projects; Economic Regulation; Financial Analysis & Internal Financial Advice; Interconnection & Fixed Network; Legal; Mobile Network; Quality of Service; and Regulatory Technology Enforcement

BROADBAND & POLICY ANALYSIS (BB&PA) DIVISION

5. BB&PA Division is responsible for dealing with technical issues relating to convergence in telecommunication and IT Sectors. The Division handles issues relating to Broadband, Internet, Internet Telephony & VoIP, IPv6, IPTV and monitoring of performance of Internet Service Providers (ISPs) including subscribers growth on quarterly and monthly basis. The Division is responsible for IT needs of office including creation and maintenance of IT infrastructure. The Division also handles various policy related issues in Telecommunications.

Development. The Divisions are headed by Principal Advisors / Advisors.

ADMINISTRATION, HRM AND REGULATORY ENFORCEMENT DIVISION

4. Administration & HRM and RE Division is responsible for all administrative and personnel functions which include planning and control of human resource 110 Annual Report 2010-11

BROADCASTING & CABLE SERVICES (B&CS) DIVISION

6. B&CS Division is responsible for advising the Authority, for laying down the overall regulatory framework for the broadcasting and cable TV sector

encompassing the interconnection, quality of service and tariff aspects, to ensure effective interconnection between the service providers, to ensure implementation of laid down quality of service and tariff norms by service providers and to ensure compliance of license conditions in the sector by the service providers. B&CS division is also responsible for examination of issues relating to the modernization/ digitization of the Broadcasting and cable TV sector and proposing recommendations regarding the same, monitoring and follow up of the complaints as provided in the laid down regulations, examination and proposing recommendations regarding introduction of new broadcasting and cable TV services and measures to protect the interest of all the stakeholders of the industry.

interacts with them on various issues concerning the consumers. The other activities of CA division include organization of consumer education workshops in all the regions of the country assisting the consumer organizations registered with TRAI to organize consumer education workshops at district and block levels and handling of generic consumer complaints. IR Division handles the International Relations which includes coordination with all International Organisations / bodies viz ITU, APT, World Bank, WTO, ADB, SATRC, OECD and Regulatory Bodies in other countries.

ECONOMIC DIVISION
8.

REGULATION

(ER)

Economic Regulation Division advises the Authority in the matter of framing appropriate tariff policy for telecom services from time to time; fixation of tariffs for various telecom services in India that are under tariff regulation which include tariff for Domestic Leased Circuits, International Private Leased Circuits and National Roaming in cellular mobile services. The Economic Regulation Division also advises the Authority on matters relating to fixation of cost based interconnection charges and on measures to promote competition in various segments of telecommunication services market in India. This Division also compiles The Annual Report 2010-11 111

CONSUMER AFFAIRS (CA) & INTERNATIONAL RELATION (IR) DIVISION

7. Consumer Affairs Division is responsible for development of consumer advocacy in the telecommunication sector and creating general awareness amongst consumers about various measures taken by the Telecom Regulatory Authority of India to protect the interest of consumers. The CA division facilitates registration of consumer organizations and non-governmental organizations from all over the country with TRAI and

Indian Telecom Services Performance Indicators Report and publishes it on quarterly basis.

licenses and also the Regulations/ Directions/Orders issued by the Division.

FINANCIAL ANALYSIS (FA) & INTERNAL FINANCE ADVICE (IFA) DIVISION

9. FA&IFA Division is responsible for providing advice on all aspects relating to cost methodologies and costing of telecom services, accounting separation, and analysis of financial statements of service providers etc. Principal Advisor (FA) is Internal Financial Advisor of TRAI and renders advice to the Authority on all financial matters, income & expenditure accounts, financial auditing and scrutiny of financial transactions.

LEGAL DIVISION
11. Legal Division is responsible for rendering legal advice to the Authority on all regulatory issues. The Division manages all litigation matters in which TRAI is a party.

MOBILE NETWORK (MN) DIVISION

12. Mobile Network Division handles issues relating to compliance of terms and conditions of various licenses issued to mobile operators; recommendations related to various issues/aspects of wireless services including Mobile Number Portability; ensuring compliance of matters relating to Universal Service Obligations and efficient management of available spectrum for telecom services; preparation of Quarterly PMR pertaining to mobile services and support to ITU/APT Study Group activities.

INTERCONNECTION & FIXED NETWORK (I&FN) DIVISION

10. I&FN Division is responsible for fixing the terms & conditions of interconnection, ensuring effective interconnection between various service providers, handling of all interconnection issues including determination of Interconnection Usage Charges (IUC) and regular review thereof, optical access issues and access charges related to cable landing stations. I&FN Division is also responsible for monitoring of compliance of license conditions of Basic, National Long Distance (NLD) and International Long Distance (ILD)

QUALITY OF SERVICE (QOS) DIVISION

13. QoS Division is responsible for laying down the standards of quality of service to be provided by the service providers; ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the

112 Annual Report 2010-11

consumers of telecommunication service. QoS Division is also responsible for maintaining register of interconnect agreements and of all such other matters as may be provided in the regulations. QoS Division also handles matters relating to Radio Paging, PMRTS and VSAT service.

of new development on regulation and areas that require new or different regulatory or non-regulatory responses. The Division publishes a Monthly Technology Digest consisting of a fairly detailed coverage of an area of topical interest and a Quarterly Technology journals as a reference material for some of the finest papers published in international telecommunications journals. The division also handles Next Generation networks and matters.

TECHNOLOGY DEVELOPMENT, RESEARCH & ANALYSIS (TDRA) DIVISION

14. Development of telecommunications technology has a profound impact on how regulatory practices evolve over time. Investment in new type of networks & technologies needs a supportive regulatory regime that provides certainty over a period of time. TRAIs Technology Development, Research & Analysis Division seeks to build up capacity for technical research in telecommunications with the aim of understanding and identifying the technology trends, their uses and potential uses so that TRAI is able to make informed decisions with an understanding of the implications for service providers, consumers and citizens in the regulation of communications markets. Through research TRAI would seek to understand the drivers of change in telecommunications particularly 15.

(c) (i)

HUMAN RESOURCES Staff strength of TRAI (as on 31.03.2011)

A staff of 188 (as on 31.03.2011) is handling the work in the Secretariat, which performs the tasks assigned to it by the Authority in the discharge of its functions. Wherever necessary, Consultants are engaged on the following basis: Individual Consultants on

retainership basis Consultants for specific projects Consulting Firms on retainership basis Consulting Firms for specific projects Engagement of Consultants is either on secondment or assignment basis. As on 31 st March 2011, the Staff strength of the TRAI was as under:

convergence in various forms. Of special importance would be the implications

Annual Report 2010-11 113

S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Posts SECRETARY PR. ADVISOR / ADVISOR JT. ADVISOR /DY. ADVISOR SR. PR. PRIVATE SECRETARY SR. RESEARCH OFFICER PPS TECHNICAL OFFICER SECTION OFFICER PS LIBRARIAN ASSISTANT PA STENOD JR. HINDI TRANSLATOR LDC DRIVERS PCM OPERATOR DESPATCH RIDER ATTENDANTS TOTAL

Sanctioned 01 15 35 03 37 02 12 19 14 1 48 18 01 01 07 15 02 01 08 240

Actual 01 15 21 03 28 02 10 16 10 34 17 05 15 02 01 08 188

Details of Secretary, Pr. Advisors / Advisors Sl. No. Name of the Officer / Designation Sl. No. 3. 1. Sh. R.K. Arnold Secretary Name of the Officer / Designation Sh. Elias G. Principal Advisor (Broadcasting & Policy Analysis) Sh. N. Parameswaran Principal Advisor (Consumer Affairs & International Relations)

2.

Sh. R.K. Mishra Principal Advisor (Administration & HRM and RE)

4.

114 Annual Report 2010-11

Sl. No. 5.

Name of the Officer / Designation Sh. Lav Gupta Principal Advisor (Technology Development) Sh. Sudhir Gupta Principal Advisor (Mobile Network) Mrs. Anuradha Mitra Principal Advisor (Financial Analysis & Internal Finance)

Sl. No. 13.

Name of the Officer / Designation

Sh. A. Robert Jerard Ravi Advisor (Quality of Services)

6.

14.

Sh. Arvind Kumar Advisor (Interconnection and Fixed Network)

7.

15.

Sh. Sanjeev Banzal Advisor (Mobile Network)

16. 8. Sh. Harsh Bardhan Principal Advisor (Legal)

Sh. Raj Kumar Upadhyay Advisor (Broadband & Policy Analysis)

9.

Sh. S.K. Gupta Advisor (Consumer Affairs & Special Projects)

16.

10.

Sh. K.J.S. Bains Advisor (Legal)

11.

Sh. Raj Pal Advisor (Economic Regulation)

12.

Sh. Wasi Ahmad Advisor (Broadcasting & Cable Services)

TRAI officials are initially drafted on deputation from the Government Departments. These deputationists with relevant experience in the fields of telecommunication, economics, finance, administration, etc., are initially appointed for two years and thereafter, if required, requests are sent to different Government departments for extending their deputations. Seeking extension of deputations in respect of trained and experienced existing employees has often proved to be a time taking process and not always an effective process. While the scope, scale and complexity of Authoritys functions continue to grow at a fast pace, the Authority is continuously facing the

Annual Report 2010-11 115

problem of losing trained and experienced personnel due to frequent repatriation of the existing personnel to their parent departments. To overcome this difficulty, TRAI has amended the Telecom Regulatory Authority of India (Officers and Staff Appointment) Regulations, 2010 (Ninth and Tenth Amendments) on 23rd April 2010 and 13th July 2010, respectively vide which the eligibility criteria of various grade officers coming to TRAI on deputation were modified for senior officers.

offer, is not handsome enough to attract appropriate talent. Hence, the Authority is facing major difficulties in getting appropriate personnel for its secretariat. 18. As regards the terms and conditions of service in the TRAI, the opinion in the Government circles has mostly been that these should be the same or almost similar to the Government Service Rules. Such a view overlooks the fact that the TRAI is a specialised body, which requires expertise in different areas of telecommunication and therefore needs to attract persons not only from the Government but also from the market. To attract the appropriate talent, TRAIs terms and conditions of service must be competitive with the prevailing market terms and conditions. At the very least, TRAI should be able to provide terms and conditions applicable in general to the telecom companies and PSUs.

ii)
17.

Recruitment
The Authority has constituted its own cadre of officers and staff by way of absorbing the officials who are on deputation to TRAI from various Ministries and Departments. However, most of the deputationists, particularly in the senior and middle levels did not exercise option for permanent absorption. Therefore, the recruitment of personnel for its Secretariat by way of deputation from other Ministries / Departments / PSUs still continues. This is due to two reasons. Firstly, the prevailing remuneration package does not attract independent talent with expertise and experience in the areas covered by the Authority. Secondly, among Government employees, the relevant expertise is available mainly in the Ministries or with the Government owned Telecom Operators. Even for this group, the remuneration package, which the Authority is in a position to

iii)
19.

Training
TRAI has given utmost importance to its HRD programme with a view to develop expertise and ability of its staff to handle vast amount of data to monitor the various developments and proposals with respect to tariffs and quality of services standards, conduct and coordinate surveys on Quality of Service issues and other consumer related matters. This initiative has proved to be useful in preparation of consultation papers and analysis of feedback and

116 Annual Report 2010-11

responses received thereon and also for conducting Open House Discussion meetings. In selecting/designing training programmes/workshops, TRAIs endeavour is to impart diverse skills for macro level policy framing and handling of large mass of techno-economic operating details relevant for implementation and monitoring of the policies. The immense logistical as well as analytical preparation involved in this process imply the need for staff which is highly trained and knowledgeable and also adaptive and flexible in its approach and functioning. Since special programmes need to be identified or designed and run to meet the specific needs of TRAI staff to address the diverse specialised needs of their task, the Authority is working closely with a number of institutes and organizations such as Indian Institute of Management (IIM), National Productivity Council (NPC), Institute of Secretariat and Training Management (ISTM), Advance Level Telecom Training Centre (ALTTC) etc. In addition, TRAI has also sponsored its officers for international training under the Institutional Capacity Building Project for further developing their expertise within the organization. 20. Few TRAI officers were deputed during the year to attend International Training programmes conducted by various Institutions and International Telecommunications Union. The officers have received valuable inputs through these trainings and the inputs have enriched their skills in their respective

area of regulatory work. Thirty one officers/officials of TRAI were also deputed for training programmes conducted by ten different training institutions within the country. 21. TRAI also has in place a system of inhouse training and workshops, where distinguished national and international experts are invited for interaction with its officers on latest developments in the telecom sector. To strengthen the computer knowledge of TRAI officers/ officials, 67 officers were deputed for advance level computer training programme conducted by DOEACC/ ALTTC/IICA and 52 officials for NIIT computer training programme respectively. These are the steps for capacity building by TRAI for its officers and staff.

iv)
22.

Seminar/Workshops
In order to keep pace with the developments taking place globally, the Authority has deputed members of its staff for international events, meetings and symposia to keep track of these developments and to gather valuable feedback/ inputs for its own policy formulation. TRAIs participation in thirty one deliberations at international level during the year 2010-11 has not only contributed well to the international efforts being focused on issues, which are currently major regulatory concerns in India but have also helped in keeping the TRAI officials aware of International practices.

Annual Report 2010-11 117

v)
23.

Office accommodation
As per the policy of the Government of India TRAI is an eligible office for Office Accommodation from Government pool. But, from its inception in 1997 TRAI has been functioning through rented accommodation. In the past TRAI had made vigorous attempt to get its own office premises through Ministry of Communications & IT but of no avail. TRAI being an autonomous regulatory body for regulating the affairs of Telecom Sector and Broadcasting and Cable Services needs it own office premise to keep its autonomous character intact. Presently, TRAIs office is located in the building owned by MTNL on rental basis.

prior to their joining in the Authority on payment of special licence fee by TRAI to the Directorate of Estates. In view of the forgoing position, the Directorate of Estates is neither allotting the general pool accommodation nor allowing retention of the accommodation already allotted, either to the officers or to the staff, after they get absorbed in TRAI.

(d)
25.

FUNDING
TRAI is an autonomous body and it is wholly funded by grant received from the Consolidated Fund of India. The total expenditure on the functioning of TRAI in the year 2010-11 was Rs. 41.62 crores out of this, Rs. 7.34 crores was incurred during 2010-11 on the Institutional Capacity Building Project covering certain consultancy and training programmes. TRAI is of the view that in order to perform effectively as an independent regulator, it should be funded from a minor portion of the licence fees recovered as a cost of administration from those whom it regulates, and it should be empowered with the flexibility in determining the terms and conditions of its employees to enable it to recruit talents / professionals from non-government sources also at senior and other levels. It is worth mentioning that some other national regulatory bodies like IRDA and SEBI are funded out of the fees recovered from the sector they regulate and hence these authorities have the flexibility to use

vi)
24.

Residential quarters for TRAI staff

As per the existing policy of the Government of India employees joining the Authority on deputation are permitted retention of general pool accommodation on payment of Special Licence Fee by the Authority who may recover normal licence fee from the employees. Permissible period of retention will be till the superannuation of the employees or till the duration of their tenure with the Authority, whichever is earlier. The eligibility for allotment of General Pool residential accommodation would be restricted to the officers posted in the Secretariat of the Authority (TRAI) in Delhi, who were eligible for allotment of accommodation from General Pool

26.

118 Annual Report 2010-11

these funds as per the specific requirements of their functioning.

(e)
27.

RIGHT TO INFORMATION ACT

The Right to Information Act, 2005, which came into force from 12 th October 2005 is also applicable to TRAI. Accordingly, in consonance with the provisions of the Act, the Authority has designated a Central Public Information Officer in TRAI assisted by a Central Assistant Public Information Officer. Officers of the level of Principal Advisors have been designated as Appellate Authority and Transparency officers under the Act. Name and designation of these officers and the information required to be published under Section 4 (1) of the RTI Act have been placed on the website of TRAI. During the year 2010-11, 457 applications were received under the RTI Act. All these applications were promptly dealt with and replies have been sent within the stipulated period of 30 days.

effectiveness of Quality Management System (QMS) in TRAI, BIS has also conducted six surveillance audits and two renewal audits since December, 2004. The quality-auditors have found the QMS functioning satisfactorily and had recommended the continuance of the license issued by the BIS. 30. Conducting internal quality audit on a quarterly basis has also ensured the continual improvement in the system. TRAI has 61 internal quality auditors for the purpose. The Quality Management System is also reviewed by the Secretary on a monthly basis and by the Top Management in a year. The last Management review meeting was held in the month of August, 2010.

(g)
31.

28.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

An Official Language Section is functioning under the supervision of Secretary in Telecom Regulatory Authority of India to implement the provisions of Official Language Act, 1963, Official Languages Rules, 1976 and other administrative instructions issued on the subject from time to time by the Department of Official Language (Ministry of Home Affairs). TRAI makes every effort to ensure the compliance of the Official Language policy of the Union Government in TRAI. Besides, it also caters to the translation needs of various Divisions as and when regulations, press communiqus, tender notices, gazette notifications and

(f)
29.

IS/ISO 9001 : 2008 CERTIFICATION TO TRAI

TRAI had been awarded ISO 9001:2000 certification in December 2004 by Bureau of Indian Standards (BIS). The same was renewed twice in the year 2007 and 2010 with the validity period of three years. The present series of ISO Standards IS/ISO 9001:2008 certification awarded to TRAI is valid for period upto November, 2013. To evaluate the implementation and

Annual Report 2010-11 119

other documents are issued in bilingual form. 32. The implementation of Official Language policy of the Union Government by all the Divisions and Sections of TRAI is monitored by the Official Language Implementation Committee (OLIC) constituted under the Chairmanship of Pr. Advisor (Admn. & HRM) and RE. Meetings of the OLIC are held regularly in every quarter. In these meetings, special emphasis is given on increasing the progressive use of Hindi in official work. Besides, a review of the current status of implementation of Official Language policy in TRAI is also done and future action-plan in this regard is drawn. Valuable suggestions of the members of the Committee are invited to gear up the work relating to Official Language. During the period of the report, four meetings of OLIC were held on 18th May 2010; 13 th September 2010; 19 th January 2011 and 29th March 2011. In compliance with the directives received from Department of Official Language (Ministry of Home Affairs) and Department of Telecommunications, Hindi Pakhwara was organized in TRAI from 14 th to 30 th September, 2010 during which various Hindi competitions viz. Hindi essay writing, poetry recitation, speech, noting/ drafting, slogan writing, debate etc. were organized. A number of officers upto the rank of Joint Advisor and staff took part in the competition with great

zeal and enthusiasm. On the occasion of Hindi Day, a message from Chairman, TRAI for ensuring the compliance of Official Language rules/regulations was circulated among the officers/staff on 14th September, 2010. Chairman, TRAI gave away the cash prizes and certificates of merit to the winners of the competitions in a function held on 23 rd December 2010. The Hindi Pakhwara organized in the month of September 2010 proved successful in promoting and propagating the maximum use of Hindi in official work. 34. In order to increase the progressive use of Hindi in day-to-day official work, an annual incentive scheme viz. Varshik Protsahan Yojna has been introduced in TRAI for officers/employees for the last four years. Under this scheme, 10 cash prizes are given every year to the officers/employees for doing their maximum official work in Hindi during the period of the scheme. This scheme has proved to be very popular among the staff and it has encouraged the staff to do their maximum of official work in Hindi throughout the year. With a view to facilitate officers/staff to do noting and drafting in Hindi and also to apprise them of the Official Language policy of the Union government, regular Hindi workshops are organized in TRAI. During these workshops dictionaries, administrative glossaries, help/ reference books etc. are distributed to the participants which render them useful help while doing their official

33.

35.

120 Annual Report 2010-11

work in Hindi. During the period under report, two Hindi workshops were organized in TRAI on 14th September 2010; and 10th February 2011. 36. The bilingual magazine TRAI DARPAN is a representative in-house magazine of TRAI and it is published half yearly.

Two issues of TRAI DARPAN (Issue No.7 and 8) were published during the period of the Report. These issues were widely appreciated both within the Authority and by the members of Hindi Salahakar Samiti of the Department of Telecommunications.

Annual Report 2010-11 121

122 Annual Report 2010-11

B) AUDITED ACCOUNTS OF TRAI FOR THE YEAR 2010-11

eparate Audit Report of the Comptroller & Auditor General of India on the Accounts of Telecom Regulatory Authority of India for the year ended 31 March 2011

We have audited the attached Balance Sheet of the Telecom Regulatory Authority of India as on 31 March 2011 and the Income and Expenditure Account/Receipts and Payments Account for the year ended on that date under Section 19(2) of the Comptroller & Auditor Generals (Duties, Powers & Conditions of Service) Act, 1971 read with Section 23(2) of the Telecom Regulatory Authority of India Act, 1997 (as amended in January 2000). These financial statements are the responsibility of the Telecom Regulatory Authority of Indias management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. This separate Audit Report contains the comments of the Comptroller & Auditor General of India (CAG) on the accounting treatment only with regard to classification, conformity with the best accounting practices, accounting standards and disclosure norms, etc. Audit observations on financial transactions with regard to compliance with the Law, Rules & Regulations (Propriety and Regularity) and efficiency-cum performance aspects, etc, if any, are reported through Inspection Reports/CAGs Audit Reports separately. We have conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial

3.

Annual Report 2010-11 123

statements are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion. 4. Based on our audit, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of audit; The Balance Sheet and the Income and Expenditure Account/Receipts and Payments Account dealt with by this report have been drawn up in the Uniform format of Accounts approved by the Controller General of Accounts under Section 23 (1) of the Telecom Regulatory Authority of India Act, 1997 (as amended in January 2000). In our opinion, proper books of accounts and other relevant records have been maintained by the Telecom Regulatory Authority of India. We further report that:

A.

Grants in aid Out of the grants in aid (Non-Plan) of Rs 35.21crore (including unspent balance of Rs 1.71 crore (Non Plan) out of the earlier year s grants in aid) received during the year, TRAI could utilise a sum of Rs 34.32 crore (Non Plan), leaving a balance of Rs 0.89 crore (Non Plan) as unutilised grant as on 31 March 2011. Further, out of the grants in aid (Plan) of Rs 5.99 crore (including unspent balance of Rs 0.49 crore (Plan) out of the earlier years grant (Plan) lying with TRAI) received during the year, TRAI could utilise a sum of Rs 5.84 crore (Plan), leaving a balance of Rs 0.15 crore (Plan) as unutilised grant as on 31 March 2011. v. Subject to our observations in the preceding paragraphs, we report that the Balance Sheet and the Income and Expenditure Account/Receipts and Payments Account dealt with by this Report are in agreement with the books of accounts. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the Accounting Policies and Notes on Accounts, and subject to the significant matters stated above and other matters mentioned in AnnexureI to this Audit Report give a true

ii.

vi.

iii.

iv.

124 Annual Report 2010-11

and fair view in conformity with the accounting principles accepted in India: a. In so far as it relates to the Balance Sheet (both Plan and Non-Plan) of the state of affairs of the Telecom Regulatory

Authority of India as on 31 March 2011; and b. In so far as it relates to the Income and Expenditure Account of the Deficit (both Plan and NonPlan) for the year ended on that date.

For and on behalf of the C&AG of India

Sd/(Revathi Bedi) Director General of Audit (P&T) Place: Delhi Date: 21 September 2011

Annual Report 2010-11 125

ANNEXURE-I
As per the information and explanations given to us, the books and records examined by us in normal course of audit and to the best of our knowledge and belief, we further report that: commensurate with its size and the nature of its functions.

(3) System of physical verification of fixed assets

The System of physical verification of fixed assets of the organisation is adequate and commensurate with its size and the nature of its functions.

(1) Adequacy of Internal Audit System

The internal Audit System of the organisation is adequate and commensurate with its size and the nature of its functions. But the Internal Audit is not independent (Reporting to the head of finance instead of head of orgnisation) as the compliance of scope and observations rests with the auditee unit themselves.

(4) System of physical verification of inventory

The system for physical verification of inventory is adequate and commensurate with its size and the nature of its functions.

(2) Adequacy of Internal Control System

The internal control system of the organisation is adequate and

(5) Regularity in payment of statutory dues

There was no disputed amount payable in respect of any other statutory dues including Contributory Provident Fund.

126 Annual Report 2010-11

FORM OF FINANCIAL STATEMENTS(NON-PROFIT ORGANISATIONS) TELECOM REGULATORY AUTHORITY OF INDIA BALANCE SHEET AS AT 31-03-2011 Schedule CORPUS/CAPITAL FUND RESERVES AND SURPLUS EARMARKED/ENDOWMENT FUNDS SECURED LOANS AND BORROWINGS UNSECURED LOANS AND BORROWINGS DEFERRED CREDIT LIABILITIES CURRENT LIABILITIES AND PROVISIONS TOTAL ASSETS FIXED ASSETS INVESTMENTS-FROM EARMARKED/ ENDOWMENT FUNDS INVESTMENTS-OTHERS CURRENT ASSETS,LOANS,ADVANCES ETC MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) TOTAL SIGNIFICANT ACCOUNTING POLICIES CONTINGENT LIABILITIES AND NOTES ON ACCOUNTS 24 25 8 9 10 11 1 2 3 4 5 6 7 NON-PLAN Current Year Previous Year 2010-11 2009-10 (2,10,72,360) 2,84,12,319 PLAN Current Year Previous Year 2010-11 2009-10 14,81,92,501 9,16,57,454

10,74,53,040 8,63,80,680 2,54,01,358

9,61,50,546 12,45,62,865 2,42,30,840

2,52,17,504 17,34,10,005 2,02,114

1,59,94,880 10,76,52,334 2,53,560

Annual Report 2010-11 127

6,09,79,322

10,03,32,025

17,32,07,891

10,73,98,774

8,63,80,680

12,45,62,865

17,34,10,005

10,76,52,334

Sd/Pr. Advisor (FA/ IFA)

Sd/Secretary

Sd/Member

Sd/Chairperson

128 Annual Report 2010-11

FORM OF FINANCIAL STATEMENTS (NON-PROFIT ORGANISATIONS) TELECOM REGULATORY AUTHORITY OF INDIA INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31-03-2011 Schedule INCOME Income from Sales/Services Grants/Subsidies Fee/Subscriptions Income from Investments(Income on Invest from earmarked /endow. Funds transferred to Funds Income for Royalty ,Publication etc Interest Earned Other Income Increase (decrease) in stock of Finished goods and works-in-progress TOTAL (A) EXPENDITURE Establishment Expenses Other Administrative Expenses etc Expenditure on Grants, Subsidies etc Interest Depreciation(Net Total at the year end-corresponding to Schedule 8) TOTAL (B) 20 21 22 23 NON-PLAN Current Year Previous Year 2010-11 2009-10 PLAN Current Year Previous Year 2010-11 2009-10

12 13 14 15 16 17 18 19

29,00,00,000

24,00,00,000

13,00,00,000

10,00,00,000

3,17,827 1,67,385

2,287 19,887

29,04,85,212 12,98,22,824 20,71,38,686

24,00,22,174 13,38,32,475 16,44,65,856

13,00,00,000

10,00,00,000

7,34,13,506

2,09,39,601

58,13,356 34,27,74,866

57,01,113 30,39,99,444

51,446 7,34,64,952

1,10,847 2,10,50,448

Schedule Balance being excess of Income over Expenditure (A-B) Transfer to Special Reserve (Specify each) Transfer to / from General Reserve BALANCE BEING SURPLUS/(DEFICIT) CARRIED TO CORPUS/CAPITAL FUND SIGNIFICANT ACCOUNTING POLICIES CONTINGENT LABILITIES AND NOTES ON ACCOUNTS

NON-PLAN Current Year Previous Year 2010-11 2009-10

PLAN Current Year Previous Year 2010-11 2009-10

(5,22,89,654) 24 25

(6,39,77,270)

5,65,35,048

7,89,49,552

Sd/Pr. Advisor (FA/ IFA)

Sd/Secretary

Sd/Member

Sd/Chairperson

Annual Report 2010-11 129

FORM OF FINANCIAL STATEMENTS (NON-PROFIT ORGANISATIONS) TELECOM REGULATORY AUTHORITY OF INDIA SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31-03-2011 SCHEDULE 1 - CORPUS/CAPITAL FUND NON - PLAN Current Previous Year Year 2010-11 2009-10 Balance as at the beginning of the year Add:/Less Contributions towards Corpus/Capital Fund Add/(Deduct): Balance of net income/(expenditure) transferred from the Income and Expenditure Account BALANCE SHEET AS AT THE YEAR-END 2,84,12,319 28,04,975 9,31,95,742 (8,06,153) 5,65,35,048 PLAN Current Year 2010-11 Previous Year 2009-10

9,16,57,453 1,23,12,335 3,95,567 7,89,49,552

(5,22,89,654) (6,39,77,270)

(2,10,72,360)

2,84,12,319

14,81,92,501

9,16,57,454

SCHEDULE 2 - RESERVES AND SURPLUS NON - PLAN Current Previous Year Year 2010-11 2009-10 1. Capital Reserve: As per last Account Addition during the year Less: Deductions during the year 2. Revaluation Reserve: As per last Account Addition during the year Less: Deductions during the year 3. Special Reserve: As per last Account Addition during the year Less: Deductions during the year 4. General Reserve: As per last Account Addition during the year Less: Deductions during the year TOTAL Sd/Dy. Advisor 130 Annual Report 2010-11 PLAN Current Year 2010-11 Previous Year 2009-10 -

SCHEDULE-3-EARMARKED/ENDOWMENT FUNDS (Amount-Rs.) FUND-WISE BREAKUP Fund Fund Fund Fund WW XX YY ZZ TOTALS NON-PLAN Current Previous Current Year Year Year 2010-11 2009-10 2010-11 PLAN Previous Year 2009-10

a) Opening balance of the funds b) Additions of the funds: i. Donations/grants ii. Income from investments made on account of funds iii. Other additions(Misc income , receipt of advances) TOTAL (a+b) c) Utilisation/exependiture towards objectives of funds i. Capital Expenditure - Fixed Assets - Others Total ii. Revenue Expenditure - Salaries,Wages and allowances etc - Rent - Other Administrative expenses Total TOTAL (c) NET BALANCE AS AT THE YEAR-END (a+b+c)
Notes 1) Disclosures shall be made under relevant head based on conditions attaching to the grants 2) Plan funds received from the Central/State Governments are to be shown as separate funds and not to be mixed up with any other Funds

NIL

NIL

NIL

NIL

Annual Report 2010-11 131

Sd/Dy. Advisor

SCHEDULE 4 - SECURED LOANS AND BORROWINGS NON-PLAN Current Previous Year Year 2010-11 2009-10 1. 2. 3. 4. Central Government State Government (Specify) Financial Institutions Banks a) Term Loans - Interest accrued and due b) Other-Loans(Specify - Interest accrued and due 5. Other Institutions and Agencies 6. Debentures and Bonds 7. Others(Specify) TOTAL Note : Amount due within one year SCHEDULE 5 - UNSECURED LOANS AND BORROWINGS NON-PLAN Current Previous Year Year 2010-11 2009-10 1. 2. 3. 4. Central Government State Government (Specify) Financial Institutions Banks a) Term Loans - Interest accrued and due b) Other-Loans(Specify - Interest accrued and due 5. Other Institutions and Agencies 6. Debentures and Bonds 7. Others(Specify) TOTAL Note : Amount due within one year Sd/Dy. Advisor 132 Annual Report 2010-11 PLAN Current Previous Year Year 2010-11 2009-10 Current Year 2010-11 PLAN Previous Year 2009-10 -

SCHEDULE 6 - DEFERRED CREDIT LIABILITIES NON-PLAN PLAN Current Year Previous Year Current Year Previous Year 2010-11 2009-10 2010-11 2009-10 1. Acceptance secured by hypothecation of capital equipment and other assets 2. State Government (Specify) -

SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONS NON-PLAN PLAN Current Year Previous Year Current Year Previous Year 2010-11 2009-10 2010-11 2009-10 A. CURRENT LIABILITIES 1) Acceptances 2) Sundry Creditors a) For Goods b) Others 3) Advances Received 4) Interest accured but not due on: a) Secured loans/borrowings b) Unsecured Loans/borrowings 5) Statutory Liabilities a) Overdue b) Others 6) Other current Liabilities 1) For TRAI General Fund) 21,86,000 2) For Telemarketers Registration fees) 6,70,000 3) For Customer Education Fees) 97,76,062 TOTAL (A) 1,26,32,062

5,50,000

6,00,000

5,50,000

6,00,000

B. PROVISIONS 1. For Taxation 2. Gratuity 1,25,17,450 1,32,29,591 3. Superannuation/Pension 4. Accumulated Leave Encashment 1,42,53,725 1,17,27,827 5. Trade Warranties/Claims 6. Other (Specify) Provisions for expenses 6,80,49,803 7,06,43,128 TOTAL (B) TOTAL (A+B)

2,46,17,504

1,59,94,880

9,48,20,978 9,56,00,546 2,46,17,504 1,59,94,880 10,74,53,040 9,61,50,546 2,52,17,504 1,59,94,880 Sd/Dy. Advisor Annual Report 2010-11 133

134 Annual Report 2010-11

SCHEDULE 8 - FIXED ASSETS NON-PLAN (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year A. FIXED ASSETS: 1. LAND a) Freehold b) Leasehold 2. BUILDINGS a) On Freehold Land b) On Leasehold Land c) Ownership Flats/Premises d) Superstructures on land not belongng to the entity 3. PLANT MACHINERY & EQUIPMENT 4. VEHICLES 5. FURNITURE, FIXTURES GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

3,32,230

60,77,905 13,57,791 1,60,81,758 22,08,071

9,50,258 64,85,438 34,57,340

9,50,258 28,39,312 36,46,126 26,20,565 92,40,192 90,49,637 83,05,330 (Contd...)

1,82,89,829 77,76,428 14,63,764

SCHEDULE 8 - FIXED ASSETS NON-PLAN (Contd...) (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year 6. OFFICE EQUIPMENT 7. COMPUTER/ PERIPHERALS 8. ELECTRIC INSTALLATIONS 9. LIBRARY BOOKS 10. TUBEWELLS & W.SUPPLY 11. OTHER FIXED ASSETS TOTAL OF CURRENT YEAR Annual Report 2010-11 135 PREVIOUS YEAR 6,85,02,947 69,83,874 39,82,553 7,15,04,268 4,42,72,107 58,13,356 39,82,553 4,61,02,910 2,54,01,358 2,42,30,840 6,29,11,319 59,92,458 4,00,830 6,85,02,947 3,89,05,963 57,01,113 3,34,969 4,42,72,107 2,42,30,840 2,40,05,356 1,05,56,196 GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended 2,94,842 As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

1,08,51,038 70,74,174

9,54,631

80,28,805 28,22,233 34,82,022

2,74,41,404 16,55,909 30,32,295 2,60,65,018 2,17,54,357 23,40,230 30,32,295 2,10,62,292 50,02,726 56,87,047 50,01,490 12,21,458 33,44,194 2,45,803 62,22,948 11,57,013 35,89,997 30,52,795 5,36,461 1,86,040 16,93,474 45,29,474 38,44,477 32,38,835 3,51,162 2,91,399

B. CAPITAL WORK-IN-PROGRESS TOTAL

Sd/Dy. Advisor

136 Annual Report 2010-11

SCHEDULE 8 - FIXED ASSETS PLAN (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year A. FIXED ASSETS: 1. LAND a) Freehold b) Leasehold 2. BUILDINGS a) On Freehold Land b) On Leasehold Land c) Ownership Flats/ Premises d) Superstructures on land not belongng to the entity 3. PLANT MACHINERY & EQUIPMENT 4. VEHICLES (Contd...) GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

SCHEDULE 8 - FIXED ASSETS PLAN (Contd...) (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year 5. FURNITURE, FIXTURES 6. OFFICE EQUIPMENT 7. COMPUTER/PERIPHERALS 8. ELECTRIC INSTALLATIONS 9. LIBRARY BOOKS 10. TUBEWELLS & W.SUPPLY 11. OTHER FIXED ASSETS TOTAL OF CURRENT YEAR PREVIOUS YEAR B. CAPITAL WORK-IN-PROGRESS TOTAL Sd/Dy. Advisor Annual Report 2010-11 137 3,64,407 3,64,407 3,64,407 3,64,407 1,10,847 51,446 1,10,847 1,62,293 1,10,847 2,02,114 2,53,560 2,53,560 3,64,407 3,64,407 1,10,847 51,446 1,62,293 2,02,114 2,53,560 GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

SCHEDULE 9 - INVESTMENTS FROM EARMARKED/ENDOWMENT FUNDS (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 1. 2. 3. 4. 5. 6. In Governement Securities Other approved Securities Shares Debentures and Bonds Subsidiaries and Joint Ventures Others ( to be specified) TOTAL PLAN Current Previous Year Year 2010-11 2009-10 -

SCHEDULE 10 - INVESTMENTS OTHERS NON-PLAN Current Previous Year Year 2010-11 2009-10 1. 2. 3. 4. 5. 6. In Government Securities Other approved Securities Shares Debentures and Bonds Subsidiaries and Joint Ventures Others (Bank FDRs) TOTAL PLAN Current Previous Year Year 2010-11 2009-10 -

Sd/Dy. Advisor

138 Annual Report 2010-11

SCHEDULE 11 - CURRENT ASSETS, LOANS, ADVANCES ETC (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 A. CURRENT ASSETS: 1. Inventories a) Stores and Spares b) Lose tools c) Stock-in-trade Finished Goods Work in progress Raw Material 2. Sundry Debtors: a) Debts Outstanding for a period exceeding six months b) Others 3. Cash balances in hand (including cheques/drafts and imprest) 4. Bank Balances: a) With Scheduled Banks On Current Accounts TRAI General fund On Current Accounts Registration Fees On Deposit Accounts (includes margin money) On Savings Account Customer education fees On Current Accounts On Deposit Accounts On Savings 2,24,43,123 1,71,79,038 20,93,027 48,98,572 97,76,062 1,19,06,421 6,70,000 1,70,86,623 20,93,027 48,98,572 PLAN Current Previous Year Year 2010-11 2009-10

90,640

92,415

b) With non-Scheduled Banks -

5. Post Office-Savings Accounts TOTAL (A)

Sd/Dy. Advisor Annual Report 2010-11 139

SCHEDULE 11 - CURRENT ASSETS, LOANS, ADVANCES ETC (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 B. LOANS, ADVANCES AND OTHER ASSETS 1. Loans a) Staff b) Other Entities engaged in activities/objectives similar to that of Entity c) Others (TA, LTC and Festival Advances to Officers & Staff) 2. Advance and other amounts recoverable in cash or in kind or for value to be received: a) On Captial Account b) Prepayments c) Others 3. Income Accrued a) On Investments from Earmarked/Endowment Funds b) On Investments-Others c) On Loans and Advances d) Others (includes income due unrealised Rs.) 4. Claims Receivable TOTAL (B) TOTAL (A+B) 4,90,920 4,87,668 16,58,643 11,72,165 3,16,00,000 7,66,00,000 17,10,00,000 2,17,436 17,10,044 9,60,00,000 11,41,675 53,34,100 33,83,771 37,48,399 PLAN Current Previous Year Year 2010-11 2009-10

2,30,700

3,89,440

1,14,864

24,427

3,85,36,199 8,31,52,987 17,11,14,864 10,25,00,202 6,09,79,322 10,03,32,025 17,32,07,891 10,73,98,774

Sd/Dy. Advisor

140 Annual Report 2010-11

SCHEDULE 12 - INCOME FROM SALES/SERVICES (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 1. Income from Sales a) Sale of Finished Goods b) Sale of Raw material c) Sale of Scraps 2. Income from Services a) Labour and Processing Charges b) Professional/Consultancy Services c) Agency Commission and Brokerage d) Maintenrance Services (Equipment/Property) e) Others(Specify) TOTAL PLAN Current Previous Year Year 2010-11 2009-10 -

SCHEDULE 13 - GRANTS/SUBSIDIES NON-PLAN Current Previous Year Year 2010-11 2009-10 (Irrevocable Grants & Subsidies Received) 1) Central Government 2) State Govenemnt(s) 3) Government Agencies 4) Institutions/Welfare Bodies 5) International Organisations 6) Other (Specify) TOTAL PLAN Current Previous Year Year 2010-11 2009-10

29,00,00,000 24,00,00,000 13,00,00,000 10,00,00,000

29,00,00,000 24,00,00,000 13,00,00,000 10,00,00,000

Sd/Dy. Advisor

Annual Report 2010-11 141

SCHEDULE 14 - FEES/SUBSCRIPTIONS (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 1. 2. 3. 4. 5. Entrance Fees Annual Fees/Subscriptions Seminar/Program Fees Consultancy Fees Others (specify) TOTAL PLAN Current Previous Year Year 2010-11 2009-10 -

Note: Accounting Policies towards each item are to be disclosed SCHEDULE 15 - INCOME FROM INVESTMENTS Investment from Earmarked Fund NON-PLAN PLAN Current Previous Current Previous Year Year Year Year 2010-11 2009-10 2010-11 2009-10 (Income on Invest.from Earmarked/Endowment Funds Transferred to Funds) 1) Interest a) On Govt Securities b) Other Bonds/Debentures 2) Dividends a) On Shares b) On Mutual Fund Securities 3) Rents 4) Others (Specify) TOTAL TRANSFERRED TO EARMARKED/ENDOWMENT FUNDS

Sd/Dy. Advisor

142 Annual Report 2010-11

SCHEDULE 16 -INCOME FROM ROYALTY, PUBLICATION ETC (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 PLAN Current Previous Year Year 2010-11 2009-10 -

1. Income from Royalty 2. Income from Publications 3. Others (specify) TOTAL

SCHEDULE 17 - INTEREST EARNED NON-PLAN Current Previous Year Year 2010-11 2009-10 1) On Term Deposits a) With Scheduled Banks b) With Non-Scheduled Banks c) With Institutions d) Others 2) On Savings Account a) With Scheduled Banks b) With Non-Scheduled Banks c) With Institutions d) Others 3) On Loans a) Employees/Staff b) Others 4) Interest on Debtors and Other Receivables TOTAL 3,17,827 3,17,827 2,287 2,287 PLAN Current Previous Year Year 2010-11 2009-10 -

Note-Tax deducted at source to be indicated

Sd/Dy. Advisor

Annual Report 2010-11 143

SCHEDULE 18 - OTHER INCOME (Amount-Rs.) NON-PLAN PLAN Current Year Previous Year Current Year Previous Year 2010-11 2009-10 2010-11 2009-10 1. Profit on Sale/disposal of Assets a) Owned assets b) Assets acquired out of grants, or received free of cost 2. Export Incentives realized 3. Fees for Miscellaneous Services 4. Miscellaneous Income TOTAL 1,12,600 35 -

54,785 1,67,385

19,852 19,887

SCHEDULE 19 - INCREASE/(DECREASE) IN STOCK OF FINISHED GOODS & WORK IN PROGRESS NON-PLAN PLAN Current Year Previous Year Current Year Previous Year 2010-11 2009-10 2010-11 2009-10 a) Closing stock - Finished Goods - Work-in-progess b) Less Opening Stock - Finished Goods - Work-in-progess NET INCREASE/(DECREASE) [a-b] -

SCHEDULE 20 - ESTABLISHMENT EXPENSES NON-PLAN PLAN Current Year Previous Year Current Year Previous Year 2010-11 2009-10 2010-11 2009-10 a) b) c) d) e) f) Salaries and Wages 10,74,54,388 11,46,45,616 Allowances and Bonus 2,71,678 2,95,349 Contribution to Provident Fund 33,35,995 34,07,587 Contribution to Other Fund(specify) Staff Welfare Expenses 3,21,738 3,36,899 Expenses on Employees Retirement and Terminal Benefits 1,02,20,440 79,71,540 g) Others (LTC, Medical to Officers & Staff and OTA to Staff) 82,18,585 71,75,484 TOTAL 12,98,22,824 13,38,32,475 Sd/Dy. Advisor 144 Annual Report 2010-11 -

SCHEDULE 21 - OTHER ADMINISTRATIVE EXPENSES ETC (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 a) b) c) d) e) f) g) h) i) j) Purchases Labour and processing expenses Cartage and Carriage Inwards Electricity and power 13,72,422 12,61,418 Water charges Insurance 1,69,647 1,20,980 Repairs and maintenance 34,03,255 30,06,735 Excise Duty Rent,Rates and Taxes 11,07,42,133 8,62,08,792 Vehicles Running and Maintenance 22,41,168 23,32,116 k) Postage, Telephone and Communication Charges 74,52,217 71,98,930 l) Printing and Stationery 52,94,186 44,00,532 m) Travelling and Conveyance Expenses 1,65,18,050 1,54,91,323 n) Expenses on Seminar/Workshops 39,02,739 23,61,366 o) Subscription Expenses 5,36,808 7,31,047 p) Expenses on Fees q) Auditors Remuneration 1,12,700 81,243 r) Hospitality Expenses 18,93,672 17,91,007 s) Professional Charges 2,87,60,976 2,62,89,262 t) Provision for Bad and Doubtful Debts/Advances u) Irrecoverable Balances Written-off 38,221 v) Packing Charges w) Freight and Forwarding Expenses x) Distribution Expenses y) Advertisement and Publicity 1,38,17,357 52,86,127 z) Others (i) Others (Payment to Security, Housekeeping etc.) 1,09,21,356 78,38,757 (ii) Expenditure on Capacity Building SATRC meeting expenses and fees 28,000 TOTAL PLAN Current Previous Year Year 2010-11 2009-10

7,34,13,506

2,09,39,601

20,71,38,686 16,44,65,856 7,34,13,506 2,09,39,601 Sd/Dy. Advisor Annual Report 2010-11 145

SCHEDULE 22 - EXPENDITURE ON GRANTS,SUBSIDIES ETC (Amount-Rs.) NON-PLAN Current Previous Year Year 2010-11 2009-10 a) Grants given to Institutions/ Organisations b) Subsidies given to Institutions/ Organisations TOTAL Note: Name of Entities,their Activities along with the amount of Grants/Subsidies are to be disclosed PLAN Current Previous Year Year 2010-11 2009-10 -

SCHEDULE 23 - INTEREST NON-PLAN Current Previous Year Year 2010-11 2009-10 a) On Fixed Loans b) On Other Loans (including Bank Charges) c) Others (specify) TOTAL PLAN Current Previous Year Year 2010-11 2009-10 -

Sd/Dy. Advisor

146 Annual Report 2010-11

TELECOM REGULATORY AUTHORITY OF INDIA RECEIPTS AND PAYMENTS FOR THE PERIOD/YEAR ENDED 31-03-2011
RECEIPTS NON-PLAN Current Year 2010-11 I. Opening Balance 92,415 1,70,86,623 46,694 30,39,914 48,98,572 46,86,564 Previous Year 2009-10 Current Year 2010-11 PLAN Previous Year 2009-10 I. Expenses 13,56,62,766 15,48,82,015 5,83,15,108 1,71,78,985 PAYMENTS NON-PLAN Current Year 2010-11 Previous Year 2009-10 Current Year 2010-11 PLAN Previous Year 2009-10

a) Cash in hand i) In current accounts ii) In deposit accounts ii) Savings accounts II. Grants Received a) From Government of India b) From State Government c) From other sourches(details) (Grants for capital & revenue exp to shown sperate ly) III. Income on Investments from a) Earmarked/Endow Funds b) Own Funds(Oth Investment) IV. Interest Received a) On Bank depostis

a) Establishment Expenses 12,56,42,776 (corresponding to Schedule 20) b) Administrative expenses 21,00,19,432 (corrosponding to Schedule 21) II. Payments made against funds for various projects (Name the fund or project should be shown alongh with the particulars of payments made for each project)

33,50,00,000

31,00,00,000

5,50,00,000

2,30,00,000

III. Investments and deposits made a) Out of Earmarked/Endowment funds b) Out of Own Funds (investments-Others) IV. Expenditure on Fixed Assets & Capital Work-in-progress a) Purchase of Fixed Assets b) Expenditure on Capital Work-in-progress V. Refund of surplus money/ Loans a) To the Government of India b) To the State Government 48,000 76,00,448 58,03,855 3,64,407

Annual Report 2010-11 147

(Contd...)

148 Annual Report 2010-11

RECEIPTS

NON-PLAN Current Year 2010-11 Previous Year 2009-10 2,287 Current Year 2010-11

PLAN Previous Year 2009-10

PAYMENTS

NON-PLAN Current Year 2010-11 Previous Year 2009-10 Current Year 2010-11

PLAN Previous Year 2009-10

b) Loans,Advances et c) Miscellaneous V. Other Income(Specify) To Miscellaneous Income

4,363

c) To other providers of funds( Consumer Protection Fund) VI. Finance Charges(Interest)

54,785

19,852

VII. Other Payments(Specify) Loans and advances and security deposits 90,437 52,44,600

VI. Amount Borrowed

VII. Any other receipts (give details) To Fees To Security Deposits To Sale of Assets To loans and advances & security deposits To Registration Fees To Customer Education Fees TOTAL 16,36,000 1,12,600 12,72,931 6,70,000 97,76,062 36,57,05,779 31,35,75,674 6,04,98,572 2,76,86,564 6,00,000 27,675 4,39,252

VIII.Closing Balances
a) Cash in hand b) Bank Balances i) In current accounts TRAI General fund 1,19,06,421 6,70,000 1,70,86,623 20,93,027 48,98,572 90,640 92,415

ii) In current accounts Registration fees ii) In deposit accounts iii) Savings accounts Customer Education Fees TOTAL

97,76,062 36,57,05,779 31,35,75,674 6,04,98,572 2,76,86,564

Sd/Pr. Advisor (FA/ IFA)

Sd/Secretary

Sd/Member

Sd/Chairperson

SCHEDULE 24 - SIGNIFICANT ACCOUNTING POLICIES 1. (a) Accounting Conventions: The financial statements have been prepared in the Uniform Form of Accounts as approved by the Controller General of Accounts vide their letter No. F.No.19(1)/Misc./2005/TA/450490 dated 23.07.2007 for both Non-Plan and Plan activities appropriately and distinctly. Accounts have been prepared on accrual basis for the current year i.e., 2010-11 - There is no change in Method of Accounting from the preceding year. Provisions for all the undisputed and known liabilities have been made in the Books of Account. Figures have been rounded off to the nearest rupee. Contingent liabilities are disclosed after careful evaluation of facts and legal aspects of the matter involved. Fixed Assets: Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental and direct expenses related to acquisition. 3. (a) Depreciation: Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV of the Companies Act, 1956 except for the categories mentioned below on which higher rates of depreciation have been applied, as applied in the Accounts for preceding years: Minimum prescribed depreciation rate as per Companies Act, 1956 4.75% 6.33% 4.75% 4.75% 4.75% Depreciation rate applied

(b)

(c)

(d) (e)

2.

Category

Office Equipments Furnitures and Fixtures Electrical Appliances Airconditioners Books and Publications

10.00% 10.00% 10.00% 10.00% 20.00%

Office Equipments includes Mobile Handsets provided to the officers for official purposes. It has been decided by the Competent Authority vide Order No. 2-1/97-LAN dated 04.05.2007 to provide/write off these handsets in three years on the same pattern as DoT. Accordingly depreciation on Mobile Handsets from the year 2007-08 onwards have been charged off Annual Report 2010-11 149

@ 33.33%.Further, It has also decided by Authority, vide order no 23-24/2008/GA (LT) dated 19/03/2009 that life span for the Laptop issued to TRAI officers will henceforth be of four years . Accordingly, depreciation on Laptop has been provided @ 25%]. (b) In respect of additions to Fixed Assets during the year, depreciation is considered on Prorata basis. Assets costing Rs. 5,000/- or less, each are fully provided. Foreign Currency Transactions: Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of transaction. 5. (a) Retirement Benefits: Provision for Leave Salary and Pension Contribution up to 31.03.2011 in the case of employees on deputations have been provided in the Books of Accounts at the rates prescribed by Government of India under Fundamental Rules from time to time. In the case of regular employees, provision for Leave Encashment and Gratuity for the year 2010-11 have been made on the basis of report furnished by the actuary. Govt. Grant : No grant in respect of specific fixed assets has been received during the current year. Govt. grants are accounted for on the basis of sanctioned amount. SCHEDULE 25 - CONTINGENT LIABILITIES AND NOTES ON ACCOUNTS 1. Contingent Liabilities: Claims against the Entity not acknowledged as debts Current Year (Nil) (Previous year Nil) 2. Current Assets, Loans and Advances: In the opinion of the Management, the current assets, loans and advances have a value on realization in the ordinary course of business, equal at least to the aggregate amount shown in the Balance Sheet. 3. Taxation: As per clause 32 of the TRAI Act, 1997, TRAI is exempt from tax on Wealth and Income. 4. Fixed assests include:Out of four vehicles purchased from DoT for Rs. 14, 71,692/- during 1997-98, two cars were transferred to TDSAT in October, 2000. The cost of these two cars was Rs. 7,35,846/- and

(c) 4.

(b)

6. (a) (b)

150 Annual Report 2010-11

accumulated depreciation on date of transfer was Rs. 2,48,211. The amount of WDV of such cars on the date of transfer was Rs. 4,87,635/- which has been debited to claims recoverable from TDSAT/DOT. The matter is pending with DoT. 5. Grants: During the accounting year i.e. 2010-11 the grants sanctioned for transfer to TRAI General Fund under Non Plan head was Rs. 29.00 crore against which a sum of Rs.33.50 crores was received as grant from DoT. A sum of Rs. 3.16 crore receivable from DoT has been shown in Schedule-11 under the head Advance and other amounts recoverable in cash or in kind or for value to be received. Similarly, the grant for transfer to TRAI General Fund under PLAN head of account was sanctioned as Rs. 13.00 crore against which a sum of Rs. 5.50 crore was received as grant from DoT. A sum of Rs. 17.10 crore receivable from DoT has been shown in Schedule-11. 6. Transactions relating to the Telecom Commercial Communications Customer Preference Regulations, 2010 As per the provisions of The Telecom Commercial Communications Customer Preference Regulations,2010, TRAI has opened four accounts with corporation Bank for deposition of Registration Fee, Customer Education Fee, Penalty TelemarMarketers and Financial Disincentive Accounts. During the financial year ending on 31-03-2011 a sum of Rs.6,70,000/- & Rs.97,76,062/- has been received in account of Registration Fee and Customer Education Fee respectively. This amount has been shown in Schedule 7 - Current liabilities & provisions under the head Other liabilities. 7. Previous year figures: Corresponding figures for the previous year have been regrouped/arranged wherever necessary. The expenditure/income relating to the previous year i.e prior period expenditure/ income have been routed through capital fund. 8. Transactions in Foreign Currencies Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of transaction. 9. Schedules 1 to 25 are annexed to and form an integral part of the Balance Sheet as at 31 st March, 2011 and the Income and Expenditure Account for the year ended on that date.

Sd/Pr. Advisor (FA/ IFA)

Sd/Secretary

Sd/Member

Sd/Chairperson

Annual Report 2010-11 151

152 Annual Report 2010-11

C) AUDITED CONTRIBUTORY PROVIDENT FUND ACCOUNT OF TRAI FOR THE YEAR 2010-11

eparate Audit Report of the Comptroller & Auditor General of India on the Accounts of Telecom Regulatory Authority of India-Contributory Provident Fund Account for the year ended 31 March 2011

We have audited the attached Balance Sheet of the Telecom Regulatory Authority of India-Contributory Provident Fund Account as on 31 March 2011 and the Income and Expenditure Account/Receipts and Payments Account for the year ended on that date under Section 19(2) of the Comptroller & Auditor Generals (Duties, Powers & Conditions of Service) Act, 1971 read with Rule 5 (5) of the Telecom Regulatory Authority of India (Contributory Provident Fund) Rules, 2003, issued under Government of India, Extraordinary Gazette Notification No. GSR 333(E) dated 10 April 2003. These financial statements are the responsibility of the Telecom Regulatory Authority of India-Contributory Provident Fund Accounts Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. This separate Audit Report contains the comments of the Comptroller & Auditor General of India (CAG) on the accounting treatment only with regard to classification, conformity with the best accounting practices, accounting standards and disclosure norms, etc. Audit observations on financial transactions with regard to compliance with the Law, Rules & Regulations (Propriety and Regularity) and efficiency-cum performance aspects, etc, if any are reported through Inspection Reports/CAGs Audit Reports separately. We have conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and

3.

Annual Report 2010-11 153

perform the audit to obtain reasonable assurance that the financial statements are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that our audit provides a reasonable basis for our opinion. 4. i. Based on our audit, we report that: We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of audit; The Balance Sheet and the Income and Expenditure Account/Receipts and Payments Account dealt with by this report have been drawn up in the Uniform format of Accounts approved by the Controller General of Accounts under Rule 5 of the Telecom Regulatory Authority of India (Contributory Provident Fund) Rules, 2003. In our opinion, proper books of accounts and other relevant records

have been maintained by the Telecom Regulatory Authority of India Contributory Provident Fund Account. iv. Subject to our observation in the preceding paragraphs, we report that the Balance Sheet and the Income and Expenditure Account/Receipt and Payments Account dealt with by this Report are in agreement with the books of accounts. In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the Accounting Policies and Notes on Accounts, and subject to the significant matters stated above and other matters mentioned in Annexure-I to this Audit Report, give a true and fair view in conformity with the accounting principles accepted in India: In so far as it relates to the Balance Sheet of the state of affairs of the Telecom Regulatory Authority of IndiaContributory Provident Fund Account as on 31 March 2011; and In so far as it relates to the Income and Expenditure Account of the Deficit for the year ended on that date.

v.

ii.

a.

b.

iii.

For and on behalf of the C&AG of India Sd/(Revathi Bedi) Director General of Audit (P&T) Place: Delhi Date: 23 September 2011

154 Annual Report 2010-11

ANNEXURE-I TO SEPARATE AUDIT REPORT

(Referred to in paragraph 4(v) of Separate Audit Report of even date on the accounts of Telecom Regulatory Authority of India - Contributory Provident Fund Account for the year ended 31st March 2011) As per the information and explanations given to us, the books and records examined by us in normal course of audit and to the best of our knowledge and belief, we further report that: of CPF withdrawals or temporary advances are done in accordance with the relevant rules and regulations and are regularly recorded in the bank book. The funds of TRAI-CPF are invested in prescribed Government Securities/ Fixed Deposits/Mutual Funds. The interests accrued/ received on these securities are properly credited to interest income. Decisions for investment of funds are taken in the periodical meetings of Board of Trustees. Interest on the CPF deposits of the members is credited to their individual accounts at the rate specified by the Central Government from time to time for the payment of interest on subscriptions to the General Provident Fund. Deficit, if any, in the interest payable to the members is met from TRAI General Fund. The members of TRAI-CPF Account are allowed withdrawal or for temporary advance out of their balance as per the guidelines of CPF Rules. In the case of advances given to the members, the Drawing and Disbursement Officer of TRAI is informed regarding the monthly deductions to be made from salary of the concerned members towards recovery of advances. In our opinion, the internal Control System of the organisation is adequate and commensurate with its size and the nature of its functions.

(1)

Adequacy of Internal Audit System

TRAI has appointed a full-time Technical Officer (Internal Audit) with independent charge till August 2009, who was also responsible for conducting internal audit of TRAI-CPF Account. Thereafter, SO (Accounts) with additional charge of Internal Audit has inspected the accounts and paid vouchers of TRAI-CPF Accounts for the financial year 2010-11. In our opinion, the internal Audit System of the organisation is adequate and commensurate with its size and the nature of its functions. But the Internal Audit is not independent (reporting to the head of finance instead of head of organization) as the compliance of Scope and observations rest with the auditee unit themselves.

(2)

Adequacy of Internal Control System

No cash transaction is done in TRAI-CPF Account as all receipts and payments are made through cheques only. Receipt of CPF deductions and payments made to the members of TRAI-CPF on account

Annual Report 2010-11 155

156 Annual Report 2010-11

FORM OF FINANCIAL STATEMENTS (NON-PROFIT ORGANISATIONS) TELECOM REGULATORY AUTHORITY OF INDIA - CONTRIBUTORY PROVIDENT FUND ACCOUNT BALANCE SHEET AS AT 31-MAR-2011 CORPUS/CAPITAL FUND AND LIABILITIES TRAI - CPF MEMBERS ACCOUNT RESERVES AND SURPLUS EARMARKED/ ENDOWMENT FUNDS SECURED LOANS AND BORROWINGS UNSECURED LOANS AND BORROWINGS DEFERRED CREDIT LIABILITIES CURRENT LIABILITIES AND PROVISIONS TOTAL ASSETS FIXED ASSETS INVESTMENTS-FROM EARMARKED/ENDOWMENT FUNDS INVESTMENTS - OTHERS CURRENT ASSETS, LOANS, ADVANCES ETC MISCELLANEOUS EXPENDITURE - on account of Diminution on Value of Investments (to the extent not written off or adjusted) TOTAL SIGNIFICANT ACCOUNTING POLICIES CONTINGENT LIABILITIES AND NOTES ON ACCOUNTS 24 25 8 9 10 11 Schedule 1 2 3 4 5 6 7 Current Year 55969295.00 Previous Year 45396949.00 45396949.00 40656924.00 4740025.00 55969295.00 45396949.00

55969295.00

49937216.00 6032079.00

Sd/Sh. J.S. Bhatia Jt. Advisor (Accounts) Ex - Officio Trustee

Sd/Sh. S.D. Sharma Dy. Advisor (HR &OS) Ex - Officio Trustee

Sd/Sh. S.B. Singh Jt. Advisor (Legal) Trustee

Sd/Smt. Poonam Khurana P. A. (B&CS) Trustee

Sd/Sh. R.K. Mishra Pr. Advisor (A&P) Ex - Officio President

TELECOM REGULATORY AUTHORITY OF INDIA - CONTRIBUTORY PROVIDENT FUND ACCOUNT INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD/ YEAR ENDED 31-MAR-2011 INCOME Income from Sales/ Services Grants/ Subsidies Fee/ Subscriptions Income from Investments (Income on Invest from earmarked / endow. Funds transferred to Funds) Income for Royalty, Publication etc Interest Earned Other Income Increase(decrease) in stock of Finished goods and works-in-progress TOTAL (A) EXPENDITURE Establishment Expenses Annual Report 2010-11 157 Other Administrative Expenses etc Expenditure on Grants, Subsidies etc Interest Diminution Value of Investments in Mutual Funds Depreciation (Net Total at the year end-corresponding to Schedule 8) TOTAL (B) 3644667 3004804.25 (Contd...) 20 21 22 23 50.00 3627507.00 17110.00 499.25 2841422.00 162883.00 Schedule 12 13 14 15 16 17 18 19 2632661.20 Current Year 2632661.20 Previous Year 2290442.62 0.00 2290442.62

158 Annual Report 2010-11

Balance being excess of Income over Expenditure (A-B) Transfer to Misc Expenditure to the extent not written off on account of Diminution Value of Investments Transfer to / from General Reserve Balance being Surplus/ (Deficit) carried to Recoverable from TRAI General Fund SIGNIFICANT ACCOUNTING POLICIES CONTINGENT LABILITIES AND NOTES ON ACCOUNTS 11 24 25

-1012005.80

-714361.63 -

-1012005.80

-714361.63

Sd/Sh. J.S. Bhatia Jt. Advisor (Accounts) Ex - Officio Trustee

Sd/Sh. S.D. Sharma Dy. Advisor (HR &OS) Ex - Officio Trustee

Sd/Sh. S.B. Singh Jt. Advisor (Legal) Trustee

Sd/Smt. Poonam Khurana P. A. (B&CS) Trustee

Sd/Sh. R.K. Mishra Pr. Advisor (A&P) Ex - Officio President

FORM OF FINANCIAL STATEMENTS (NON-PROFIT ORGANISATIONS) TELECOM REGULATORY AUTHORITY OF INDIA - CONTRIBUTORY PROVIDENT FUND ACCOUNT SCHEDULES FORMING PART OF BALANCE SHEET AS AT 31-MAR-2011 SCHEDULE 1 - TRAI - CPF MEMBERS ACCOUNT (Amount-Rs.) Current Year Balance as at the beginning of the year Add: Contributions towards Members Account Add/(Deduct): Balance of net income/ (expenditure) transferred from the Income and Expenditure Account BALANCE AS AT THE YEAR-END 45396949.00 10572346.00 Previous Year 30077334.00 15319615.00

55969295.00

45396949.00

SCHEDULE 2 - RESERVES AND SURPLUS Current Year 1. Capital Reserve: As per last Account Addition during the year Less: Deductions during the year 2. Revaluation Reserve: As per last Account Addition during the year Less: Deductions during the year 3. Special Reserve: As per last Account Addition during the year Less: Deductions during the year 4. General Reserve: As per last Account Addition during the year Less: Deductions during the year TOTAL Previous Year

N.A.

Sd/Dy. Advisor

Annual Report 2010-11 159

160 Annual Report 2010-11

SCHEDULE-3-EARMARKED/ENDOWMENT FUNDS (Amount-Rs.) FUND-WISE BREAKUP Fund Fund Fund Fund WW XX YY ZZ a) Opening balance of the funds b) Additions of the funds: i. Donations/grants ii. Income from investments made on account of funds iii. Other additions(Misc income , receipt of advances) TOTAL (a+b) c) Utilisation/exependiture towards objectives of funds i. Capital Expenditure - Fixed Assets - Others Total ii. Revenue Expenditure - Salaries,Wages and allowances etc - Rent - Other Administrative expenses Total TOTAL (c) NET BALANCE AS AT THE YEAR-END (a+b+c)
Notes 1) Disclosures shall be made under relevant head based on conditions attaching to the grants 2) Plan funds received from the Central/State Governments are to be shown as separate funds and not to be mixed up with any other Funds

Current Year

Previous Year

N.A.

N.A.

Sd/Dy. Advisor

SCHEDULE 4 - SECURED LOANS AND BORROWINGS Current Year 1. 2. 3. 4. Central Government State Government (Specify) Financial Institutions Banks a) Term Loans - Interest accrued and due b) Other-Loans(Specify - Interest accrued and due 5. Other Institutions and Agencies 6. Debentures and Bonds 7. Others(Specify) TOTAL Note : Amount due within one year SCHEDULE 5 - UNSECURED LOANS AND BORROWINGS Current Year 1. 2. 3. 4. Central Government State Government (Specify) Financial Institutions Banks a) Term Loans - Interest accrued and due b) Other-Loans(Specify - Interest accrued and due 5. Other Institutions and Agencies 6. Debentures and Bonds 7. Others(Specify) TOTAL Note : Amount due within one year Previous Year Previous Year

N.A.

N.A.

Sd/Dy. Advisor

Annual Report 2010-11 161

SCHEDULE 6 - DEFERRED CREDIT LIABILITIES Current Year 1. Acceptance secured by hypothecation of capital equipment and other assets 2. State Government (Specify) SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONS Current Year A. CURRENT LIABILITIES 1) Acceptances 2) Sundry Creditors a) For Goods b) Others 3) Advances Received 4) Interest accured but not due on: a) Secured loans/borrowings b) Unsecured Loans/borrowings 5) Statutory Liabilities a) Overdue b) Others 6) Other current Liabilities 1) For TRAI General Fund) 2) For Telemarketers Registration fees) 3) For Customer Education Fees) TOTAL (A) B. PROVISIONS 1. For Taxation 2. Gratuity 3. Superannuation/Pension 4. Accumulated Leave Encashment 5. Trade Warranties/Claims 6. Other (Specify) TOTAL (B) TOTAL (A+B) Previous Year Previous Year N.A.

N.A.

Sd/Dy. Advisor 162 Annual Report 2010-11

SCHEDULE 8 - FIXED ASSETS (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year A. FIXED ASSETS: 1. LAND a) Freehold b) Leasehold 2. BUILDINGS a) On Freehold Land b) On Leasehold Land c) Ownership Flats/Premises d) Superstructures on land not belongng to the entity 3. PLANT MACHINERY & EQUIPMENT 4. VEHICLES 5. FURNITURE, FIXTURES (Contd...) Annual Report 2010-11 163 N.A. GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

164 Annual Report 2010-11

SCHEDULE 8 - FIXED ASSETS (Amount-Rs.) DESCRIPTION Cost/ valuation as at begining of the year 6. OFFICE EQUIPMENT 7. COMPUTER/ PERIPHERALS 8. ELECTRIC INSTALLATIONS 9. LIBRARY BOOKS 10. TUBEWELLS & W.SUPPLY 11. OTHER FIXED ASSETS TOTAL OF CURRENT YEAR PREVIOUS YEAR B. CAPITAL WORK-IN-PROGRESS TOTAL (Note to be given as to cost of assets on hire purchase basis included above) N.A. GROSS BLOCK Additions Deductions Cost/ during during valuation the year the year at the year ended As at the begining of the year DEPRICIATION Additions Deductions Total up during during to the the year the year year-end NET BLOCK As at the As at the current previous year-end year-end

Sd/Dy. Advisor

SCHEDULE 9 - INVESTMENTS FROM EARMARKED/ENDOWMENT FUNDS (Amount-Rs.) Current Year 1. 2. 3. 4. 5. 6. In Governement Securities Other approved Securities Shares Debentures and Bonds Subsidiaries and Joint Ventures Others ( to be specified) TOTAL SCHEDULE 10 - INVESTMENTS OTHERS Current Year 1. 2. 3. 4. 5. 6. In Government Securities Other approved Securities Shares Debentures and Bonds Subsidiaries and Joint Ventures Others (Fixed Deposits in Banks/PSU) TOTAL Previous Year Previous Year

N.A.

14450007.00

14467117.00

35487209.00 49937216.00

26189807.00 40656924.00

SCHEDULE 11 - CURRENT ASSETS, LOANS, ADVANCES ETC Current Year A. CURRENT ASSETS: 1. Inventories a) Stores and Spares b) Lose tools c) Stock-in-trade Finished Goods Work in progress Raw Material 2. Sundry Debtors: a) Debts Outstanding for a period exceeding six months b) Others 3. Cash balances in hand (including cheques/drafts and imprest) Previous Year

(Contd...) Annual Report 2010-11 165

SCHEDULE 11 - CURRENT ASSETS, LOANS, ADVANCES ETC (Contd...) (Amount-Rs.) Current Year 4. Bank Balances: a) With Scheduled Banks - On Current Accounts - On Deposit Accounts (includes margin money) - On Savings Account b) With non-Scheduled Banks - On Current Accounts - On Deposit Accounts - On Savings Account 5. Post Office-Savings Accounts TOTAL (A) B. LOANS, ADVANCES AND OTHER ASSETS 1. Loans a) Staff b) Other Entities engaged in activities/ objectives similar to that of Entity c) Others (Specify) 2. Advance and other amounts recoverable in cash or in kind or for value to be received: a) On Captial Account b) Prepayments c) Others 3. Income Accrued a) On Investments from Earmarked/ Endowment Funds b) On Investments - Others c) On Loans and Advances d) Others (includes income due unrealised Rs.) 4. Claims Receivable - (0.39 + 1012005.80) TOTAL (B) TOTAL (A+B) Previous Year

825953.40 825953.40

1174760.44 1174760.44

4194119.41

2850904.17

1012006.19 5206125.60 6032079.00

714360.39 3565264.56 4740025.00 Sd/Dy. Advisor

166 Annual Report 2010-11

SCHEDULE 12 - INCOME FROM SALES/SERVICES (Amount-Rs.) Current Year 1. Income from Sales a) Sale of Finished Goods b) Sale of Raw material c) Sale of Scraps 2. Income from Services a) Labour and Processing Charges b) Professional/Consultancy Services c) Agency Commission and Brokerage d) Maintenrance Services (Equipment/Property) e) Others(Specify) TOTAL SCHEDULE 13 - GRANTS/SUBSIDIES Current Year (Irrevocable Grants & Subsidies Received) 1) Central Government 2) State Govenemnt(s) 3) Government Agencies 4) Institutions/Welfare Bodies 5) International Organisations 6) Other (Specify) TOTAL SCHEDULE 14 - FEES/SUBSCRIPTIONS Current Year 1. 2. 3. 4. 5. Entrance Fees Annual Fees/Subscriptions Seminar/Program Fees Consultancy Fees Others (specify) TOTAL Note: Accounting Policies towards each item are to be disclosed Sd/Dy. Advisor Previous Year Previous Year Previous Year

N.A.

N.A.

N.A.

Annual Report 2010-11 167

SCHEDULE 15 - INCOME FROM INVESTMENTS Investment from Earmarked Fund Current Year (Income on Invest. from Earmarked/ Endowment Funds Transferred to Funds) 1) Interest a) On Govt Securities b) Other Bonds/Debentures 2) Dividends a) On Shares b) On Mutual Fund Securities 3) Rents 4) Others (Specify) TOTAL TRANSFERRED TO EARMARKED/ENDOWMENT FUNDS SCHEDULE 16 -INCOME FROM ROYALTY, PUBLICATION ETC Current Year 1. Income from Royalty 2. Income from Publications 3. Others (specify) TOTAL SCHEDULE 17 - INTEREST EARNED Current Year 1) On Term Deposits a) With Scheduled Banks b) With Non-Scheduled Banks c) With Institutions d) Others 2) On Savings Account a) With Scheduled Banks b) With Non-Scheduled Banks c) With Institutions d) Others 3) On Loans a) Employees/Staff b) Others 4) Interest on Debtors and Other Receivables TOTAL 311139.00 2225275.20 Previous Year 301272.78 1878714.84 Previous Year N.A. Previous Year

N.A.

96247.00 2632661.20

110455.00 2290442.62 Sd/Dy. Advisor

168 Annual Report 2010-11

SCHEDULE 18 - OTHER INCOME (Amount-Rs.) Current Year 1. Profit on Sale/disposal of Assets a) Owned assets b) Assets acquired out of grants, or received free of cost 2. Export Incentives realized 3. Fees for Miscellaneous Services 4. Miscellaneous Income TOTAL SCHEDULE 19 - INCREASE/(DECREASE) IN STOCK OF FINISHED GOODS & WORK IN PROGRESS Current Year a) Closing stock - Finished Goods - Work-in-progess b) Less Opening Stock - Finished Goods - Work-in-progess NET INCREASE/(DECREASE) [a-b] SCHEDULE 20 - ESTABLISHMENT EXPENSES Current Year a) b) c) d) e) f) g) Salaries and Wages Allowances and Bonus Contribution to Provident Fund Contribution to Other Fund(specify) Staff Welfare Expenses Expenses on Employees Retirement and Terminal Benefits Others (specify) Previous Year Previous Year Previous Year

N.A.

N.A.

N.A.

TOTAL

Sd/Dy. Advisor

Annual Report 2010-11 169

SCHEDULE 21 - OTHER ADMINISTRATIVE EXPENSES ETC (Amount-Rs.) Current Year a) Purchases b) Labour and processing expenses c) Cartage and Carriage Inwards d) Electricity and power e) Water charges f) Insurance g) Repairs and maintenance h) Excise Duty i) Rent, Rates and Taxes j) Vehicles Running and Maintenance k) Postage, Telephone and Communication Charges l) Printing and Stationery m) Travelling and Conveyance Expenses n) Expenses on Seminar/Workshops o) Subscription Expenses p) Expenses on Fees q) Auditors Remuneration r) Hospitality Expenses s) Professional Charges t) Provision for Bad and Doubtful Debts/Advances u) Irrecoverable Balances Written-off v) Packing Charges w) Freight and Forwarding Expenses x) Distribution Expenses y) Advertisement and Publicity z) Others (specify) - Bank Charges TOTAL 50.00 50.00 SCHEDULE 22 - EXPENDITURE ON GRANTS,SUBSIDIES ETC Current Year a) Grants given to Institutions/Organisations b) Subsidies given to Institutions/Organisations TOTAL Note: Name of Entities,their Activities along with the amount of Grants/Subsidies are to be disclosed SCHEDULE 23 - INTEREST Current Year a) On Fixed Loans b) On Other Loans (including Bank Charges) c) Others (specify) TOTAL Previous Year 2841422.00 2841422.00 Sd/Dy. Advisor 170 Annual Report 2010-11 Previous Year N.A. Previous Year 499.25 499.25

3627507.00 3627507.00

TELECOM REGULATORY AUTHORITY OF INDIA - CONTRIBUTORY PROVIDENT FUND ACCOUNT RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31-MAR-2011 RECEIPTS I. Opening Balance a) Cash in hand b) Bank Balances i) In current accounts ii) In deposit accounts iii) Savings accounts II. Grants Received a) From Government of India b) From State Government c) From Other Sources (Details) (Grants for capital & revenue exp to shown sperately) III. Income on Investments from a) Earmarked/ Endow Funds b) Own Funds (Oth Investment) IV. Interest Received a) On Bank Deposits - (Sch. A) 329716.00 580433.00 III. Investments and Deposits made a) Out of Earmarked/ Endowment funds b) Out of Own Funds (Investments - Others) IV. Expenditure on Fixed Assets & Capital Work-in-progress a) Purchase of Fixed Assets (Contd...) 14835361.00 19689807.00 1174760.44 453752.96 II. Payments made against funds for various projects (Name the fund or project should be shown along with the particulars of payments made for each project) Current Year Previous Year PAYMENTS I. Expenses a) Establishment Expenses (corresponding to Schedule 20) b) Administrative Expenses (corresponding to Schedule 21) 50.00 499.25 Current Year Previous Year

Annual Report 2010-11 171

172 Annual Report 2010-11

RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31-MAR-2011 (Contd...) RECEIPTS b) Loans, Advances etc. c) Miscellaneous - (Sch. B) V. Other Income (Specify) To Miscellaneous Income VI. Amount Borrowed VII. Any other Receipts (Give Details) Fees Capital Fund Sales of Publication Sale of Assets Contribution from Members Contribution from TRAI Transfer of Balances Repayment of Advances Maturity of FDs/ Encashment of Mutual Funds Interest Shortfall Recovered from TRAI Gen. Fund Payable to TRAI TOTAL Sd/Sh. J.S. Bhatia Jt. Advisor (Accounts) Ex - Officio Trustee Current Year 959729.96 Previous Year PAYMENTS 783488.73 V. Refund of surplus money/Loans a) The Government of India b) The State Government c) Other providers of funds VI. Finance Charges (Interest) VII. Other Payments (Specify) Final Payments Advances and Withdrawals 10553240.00 3331417.00 2986267.00 610455.00 5537959.00 714360.00 26197904.40 Sd/Sh. S.D. Sharma Dy. Advisor (HR & OS) Ex - Officio Trustee 10135390.00 3415482.00 VIII.Closing Balances 2722501.00 a) Cash in hand 466606.00 b) Bank Balances i) In current accounts 6182216.00 ii) In deposit accounts 386983.00 iii) Savings accounts 25126852.69 TOTAL Sd/Sh. S.B. Singh Jt. Advisor (Legal) Trustee Sd/Smt. Poonam Khurana P.A. (B&CS) Trustee Current Year Previous Year

b) Expenditure on Capital Work-in-progress

4052420.00 6484120.00

1732366.00 2529420.00

825953.40 26197904.40

1174760.44 25126852.69

Sd/Sh. R.K. Mishra Pr. Advisor (A&P) Ex - Officio President

SCHEDULE 24 - SIGNIFICANT ACCOUNTING POLICIES 1. i) Accounting Conventions: The financial statements have been prepared in the Uniform Format of Accounts as approved by the Controller General of Accounts vide their letter No. F.No.19(1)/Misc./2005/ TA/450-490 dated 23.07.2007. Accounts have been prepared on accrual basis for the current year i.e., 2010-11. There is no change in Method of Accounting from the preceding year. SCHEDULE 25 - CONTINGENT LIABILITIES AND NOTES ON ACCOUNTS Contingent Liabilities: 1. Claims against the Entity not acknowledged as debts NIL Notes on Accounts 1. Investments have been made on the pattern prescribed in the Notification of Ministry of Finance (Department of Economic Affairs) dated 14th August 2008, effective from 1st April 2009. As per approval of Competent Authority, the shortfall of Interest, if any, between Interest Earned on Investments made and Interest Payable to Subscribers, will be borne out of the TRAI General Fund. Accordingly, in this year, a sum of Rs. 1012006.19/- recoverable from TRAI General Fund has been accounted for. In compliance with the requirements of Accounting Standards (AS) - 13 issued by the Institute of Chartered Accountants of India (ICAI) and as suggested by the Audit party in the SAR of the financial year 2008-09, a sum of Rs. 17110/- as Diminution Value in some Mutual Fund Investments as on 31-03-2011 has been duly accounted for in the Books of Accounts.

ii)

2.

Sd/Sd/Sh. J.S. Bhatia Sh. S.D. Sharma Jt. Advisor (Accounts) Dy. Advisor (HR & OS) Ex - Officio Trustee Ex - Officio Trustee

Sd/Sh. S.B. Singh Jt. Advisor (Legal) Trustee

Sd/Sd/Smt. Poonam Khurana Sh. R.K. Mishra P.A. (B&CS) Pr. Advisor (A&P) Trustee Ex - Officio President

Annual Report 2010-11 173

174 Annual Report 2010-11

ANNEXURES

Annual Report 2010-11 175

176 Annual Report 2010-11

Annexure-I

Subscriber Base of Wireless [GSM and CDMA] Services from 2005-06 to 2010-11
(Subscriber base in millions) Service 2005-06 Providers Bharti Reliance Vodafone BSNL Idea Spice Tata Aircel Unitech Sistema Videocon MTNL Loop S Tel HFCL Etisalat Total 90.14 165.11 261.07 0.06 0.15 0.30 2.05 1.34 2.94 1.07 3.53 1.29 0.03 0.10 0.11 19.58 17.31 15.36 17.65 7.37 1.93 4.85 2.61 2006-07 2007-08 2008-09 2009-10 2010-11 %age growth over FY ending 2010 27.10% 32.51% 33.42% 32.23% 40.23%

37.14 28.01 26.44 30.99 14.01 2.73 16.02 5.51

61.98 45.79 44.13 40.79 24.001 4.21 24.33 10.61

93.92 72.67 68.77 52.15 38.89 4.13 35.12 18.48 0 0.60 0 4.48 2.16 0 0.39 0 391.76

127.62 102.42 100.86 69.45 63.82

162.20 135.72 134.57 91.83 89.50

65.94 36.86 4.26 3.78 0.03 5.09 2.84 1.01 0.33 0.0004 584.32

89.14 54.84 22.79 10.06 7.11 5.47 3.09 2.82 1.47 0.97 811.59

35.18% 48.78% 7.44% 8.78% 38.89%

Data includes WLL (F) subscribers Source: Service Provider

Annual Report 2010-11 177

Annexure-II

List of Wireless Service Providers Service Area wise as on 31st March 2011
Sl. No. 1 Category Metros Service Area Delhi Access Service Provider Bharti Vodafone MTNL Idea Cellular Ltd Aircel Ltd Etisalat DB Telecom Pvt. Ltd Videocon Telecommunications Ltd* Unitech Wireless (Delhi) Ltd* Spice Communications Ltd* Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices 2 Mumbai Loop Telecom Pvt. Ltd Vodafone MTNL Bharti Aircel Ltd Idea Cellular Ltd Etisalat DB Telecom Pvt. Ltd Videocon Telecommunications Ltd Unitech Wireless (Mumbai) Pvt. Ltd Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices 3 Chennai Aircel Cellular Ltd BSNL Vodafone Reliance Infocomm# 178 Annual Report 2010-11

Sl. No.

Category

Service Area

Access Service Provider Tata Teleservices# Bharti# Videocon Telecommunications Ltd# Idea Cellular Ltd# Unitech Wireless (Tamil Nadu) Pvt. Ltd# Etisalat DB Telecom Pvt. Ltd# Loop Telecom Private Ltd*# Sistema Shyam Teleservices Ltd#

Kolkata

Bharti Vodafone BSNL Reliance Telecom Dishnet Wireless Ltd Videocon Telecommunications Ltd* Idea Cellular Ltd Unitech Wireless (Kolkata) Ltd Loop Telecom Private Ltd Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

A Circle

Maharashtra

Vodafone Idea Cellular Ltd BSNL Bharti Aircel Ltd Videocon Telecommunications Ltd Unitech Wireless (West) Pvt. Ltd Spice Communications Ltd* Etisalat DB Telecom Pvt. Ltd Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd

Annual Report 2010-11 179

Sl. No.

Category

Service Area

Access Service Provider Reliance Infocomm Tata Teleservices

Gujarat

Vodafone Idea Cellular Ltd BSNL Bharti Aircel Ltd Videocon Telecommunications Ltd Unitech Wireless (West) Pvt. Ltd Etisalat DB Telecom Pvt. Ltd Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

Andhra Pradesh

Idea Cellular Ltd Bharti BSNL Vodafone Aircel Ltd Videocon Telecommunications Ltd Unitech Wireless (South) Ltd Spice Communications Ltd* Etisalat DB Telecom Pvt. Ltd Loop Telecom Priovate Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

Karnataka

Bharti Spice BSNL Vodafone

180 Annual Report 2010-11

Sl. No.

Category

Service Area

Access Service Provider Aircel Ltd Videocon Telecommunications Ltd Idea Cellular Ltd* Unitech Wireless (South) Ltd Etisalat DB Telecom Pvt. Ltd Loop Telecom Pvt Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

Tamil Nadu

Vodafone Aircel Ltd BSNL Reliance Infocomm# Tata Teleservices# Bharti# Videocon Telecommunications Ltd# Idea Cellular Ltd# Unitech Wireless (Tamil Nadu) Pvt. Ltd# Etisalat DB Telecom Pvt. Ltd# Loop Telecom Private Ltd*# Sistema Shyam Teleservices Ltd#

10

B Circle

Kerala

Idea Cellulat Ltd Vodafone BSNL Bharti Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (South) Ltd Etisalat DB Telecom Pvt. Ltd Loop Telecom Pvt. Ptd* Sistema Shyam Teleservices Ltd

Annual Report 2010-11 181

Sl. No.

Category

Service Area

Access Service Provider Reliance Infocomm Tata Teleservices

11

Punjab

Spice Bharti BSNL Vodafone Dishnet Wireless Ltd Idea Cellular Ltd* Unitech Wireless (North) Pvt. Ltd* Etisalat DB Telecom Pvt. Ltd Loop Telecom Pvt. Ltd Sistema Shyam Teleservices Ltd Reliance Infocomm HFCL Infocom Tata Teleservices

12

Haryana

Idea Cellular Ltd Vodafone BSNL Bharti Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (North) Pvt. Ltd* Spice Communications Ltd* Etisalat DB Telecom Pvt. Ltd Loop Telecom Private Ltd Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

13

Uttar Pradesh-(W)

Idea Cellular Ltd Bharti BSNL

182 Annual Report 2010-11

Sl. No.

Category

Service Area

Access Service Provider Vodafone Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (North) Pvt. Ltd Etisalat DB Telecom Pvt Ltd Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

14

Uttar Pradesh (E)

Vodafone BSNL Bharti Idea Cellular Ltd Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (East) Pvt. Ltd Etisalat DB Telecom Pvt. Ltd Loop Telecom Pvt. Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

15

Rajasthan

Vodafone Hexacom(Bharti) BSNL Idea Cellular Ltd Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (North) Pvt. Ltd* Etisalat DB Telecom Pvt. Ltd Loop Telecom Private Ltd Reliance Infocomm

Annual Report 2010-11 183

Sl. No.

Category

Service Area

Access Service Provider Sistema Shyam Teleservices Ltd Tata Teleservices

16

Madhya Pradesh

Idea Cellular Ltd Reliance Telecom BSNL Bharti Dishnet Wireless Ltd Videocon Telecommunications Ltd Unitech Wireless (West) Pvt. Ltd* Loop Telecom Pvt. Ltd Sistema Shyam Teleservices Ltd Essar Spacetel Pvt. Ltd (Vodafone) Allianz Infratech (P) Ltd Reliance Infocomm Tata Teleservices

17

West Bengal and Andaman & Nicobar Islands

Reliance Telecom

BSNL Bharti Vodafone Dishnet Wireless Ltd Videocon Telecommunications Ltd Idea Cellular Ltd Unitech Wireless (East) Pvt. Ltd Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices 18 C circle Himachal Pradesh Bharti Reliance Telecom

184 Annual Report 2010-11

Sl. No.

Category

Service Area

Access Service Provider BSNL Idea Cellular Ltd Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Videocon Telecommunications Ltd Unitech Wireless (North) Pvt. Ltd* S Tel Ltd Loop Telecom Private Ltd* Sistema Shyam Teleservices Ltd* Reliance Infocomm Tata Teleservices

19

Bihar

Reliance Telecom BSNL Bharti Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Aditya Birla Telecom Ltd (Idea) Videocon Telecommunications Ltd Unitech Wireless (East) Pvt. Ltd S Tel Ltd Loop Telecom Pvt. Ltd* Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices Allianz Infrastech (P) Ltd

20

Orissa

Reliance Telecom BSNL Bharti Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Videocon Telecommunications Ltd

Annual Report 2010-11 185

Sl. No.

Category

Service Area

Access Service Provider Idea Cellular Ltd Unitech Wireless (East) Pvt. Ltd S Tel Ltd Loop Telecom Pvt. Ltd Sistema Shyam Teleservices Ltd Reliance Infocomm Tata Teleservices

21

Assam

Reliance Telecom BSNL Bharti Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Videocon Telecommunications Ltd* Idea Cellular Ltd Unitech Wireless (East) Pvt. Ltd* Tata Teleservices Ltd S Tel Ltd Loop Telecom Private Ltd Sistema Shyam Teleservices Ltd*

22

North East

Reliance Telecom Bharti BSNL Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Videocon Telecommunications Ltd* Idea Cellular Ltd Unitech Wireless (East) Pvt Ltd* Tata Teleservices Ltd S Tel Ltd Loop Telecom Private Ltd Sistema Shyam Teleservices Ltd*

186 Annual Report 2010-11

Sl. No. 23

Category

Service Area Jammu & Kashmir

Access Service Provider BSNL Bharti Dishnet Wireless Ltd Essar Spacetel Pvt. Ltd (Vodafone) Videocon Telecommunications Ltd* Idea Cellular Ltd Unitech Wireless (North) Pvt. Ltd* Tata Teleservices Ltd S Tel Ltd* Loop Telecom Pvt. Ltd* Sistema Shyam Teleservices Ltd* Reliance Infocomm

Note : * Services not yet Started # Single License for Tamil Nadu & Chennai Source DOT/Service Providers

Annual Report 2010-11 187

Annexure-III

Wireless Subscribers added and annual growth rate in different circles during 2008-09, 2009-10 and 2010-11
Circles No. of % Growth No. of % Growth No. of Subscribers during year Subscribers during year Subscribers added during 2008-09 added during 2009-10 added during April, 08 to April, 09 to April,10 to March, 09 March,10 March,11 (in million) (in million) (in million) 17.28 43.23 51.75 18.43 130.69 38.56% 46.01% 54.42% 67.71% 50.06% 9.09 75.13 77.15 31.19 192.56 14.64% 54.77% 52.54% 68.32% 49.15% 25.65 76.13 94.55 30.94 227.27 % Growth during year 2010-11

Metro Circle A Circle B Circle C All India

36.03% 35.87% 42.21% 40.26% 38.89%

Source: Quarterly Reports of Service Providers

188 Annual Report 2010-11

Annexure-IV

List of Permitted Teleport

Sl. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Name of Teleport AIRR X MEDIA LTD. AMRITA ENTERPRISES PVT. LTD. ASIANET INFRASTRUCTURE PVT. LTD. ASSOCIATED BROADCASTING CO. PVT. LTD. AV ENTERTAINMENT PVT. LTD. BENNETT COLEMAN AND CO. LTD. BHARTI TELEPORTS LIMITED BRAHMAPUTRA TELE-PRODUCTIONS PVT. LTD. BROADCAST EQUIPMENTS INDIA PVT. LTD. CALCUTTA TELEVISION NETWORK PVT. LTD. CHANNEL GUIDE INDIA LTD. COMSAT SYSTEM PVT. LTD. DISH TV INDIA LIMITED EASTERN MEDIA LTD. ENTERTAINMENT TELEVISION NETWORK PVT.LTD. ESSEL SHYAM COMMUNICATION LIMITED ESSEL SHYAM COMMUNICATION LTD. ESSEL SHYAM COMMUNICATION LTD. ESSEL SHYAM COMMUNICATION LTD. ESSEL SHYAM COMMUNICATION LTD. G. NEXT MEDIA PVT. LTD. IN CABLENET ANDHRA LTD. INDEPENDENT NEWS SERVICE PRIVATE LIMITED INDEPENDENT NEWS SERVICES PVT. LTD. INDIASIGN PVT. LTD. INDIASIGN PVT. LTD. INDIASIGN PVT. LTD. INDIASIGN PVT. LTD. INDIASIGN PVT. LTD. Location SURAT THIRUVANANTHAPURAM THIRUVANANTHAPURAM HYDERABAD BHOPAL MUMBAI Noida GUWAHATI NEW DELHI KOLKATA MUMBAI HYDERABAD NOIDA BHUBANESHWER MUMBAI NOIDA NOIDA-2 NOIDA -3 MUMBAI AROOR KERALA NEW DELHI HYDERABAD NOIDA NOIDA -2 GURGAON KOLKATA CHENNAI HYDERABAD HYDERABAD (Location shifted from Noida)

Annual Report 2010-11 189

Sl. No. 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58

Name of Teleport INDIAVISION SATELLITE COMMUNICATIONS LTD. INDRA TELEVISION LTD. INFORMATION TV PVT. LTD. JAIN STUDIOS LTD. KAMYAB TV PVT. LTD. (Formerly known as MD TV Pvt. Ltd.) KANSAN NEWS PRIVATE LIMITED KASTURI MEDIA PVT. LTD. KOHINOOR BROADCASTING CORPORATION LTD. LAMHAS SATELLITE SERVICES LTD. LOK PRAKASHAN LTD. MALAYALAM COMMUNICATIONS LTD. MAVIS SATCOM LIMITED MEDIA CONTENT AND COMMUNICATION SERVICES INDIA PRIVATE LIMITED MH ONE TV NETWORK LTD. MM TV LTD. NEW DELHI TELEVISION LTD. NDTV NOIDA SOFTWARE TECHNOLOGY PARK LTD. ORTEL COMMUNICATIONS LTD. POSITIVE TELEVISION PVT. LTD. POSITIVE TELEVISION PVT. LTD. PRAGYA VISION PVT. LTD. PRIDE EAST ENTERTAINMENT PVT. LIMITED RACHANA TELEVISION PVT. LTD. RAJ TELEVISION NETWORK LTD. RAJASTHAN PATRIKA PRIVATE LIMITED ROYS INSTITUTE OF COMPETITIVE EXAMINATION PVT LTD SAHARA SANCHAR LIMITED SANSKAR INFO TV PVT. LTD. SATISH SUGERS LTD.

Location KOCHI - KERALA HYDERABAD NEW DELHI GREATER NOIDA BHUBANESHWER CHANDIGARH BANGALORE RAJPURA - PUNJAB MUMBAI AHMEDABAD THIRUVANANTHAPURAM CHENNAI NOIDA DELHI ALAPUZZA NEW DELHI GREATER NOIDA BHUBANESHWER GUWAHATI NOIDA NOIDA GUWAHATI HYDERABAD CHENNAI JAIPUR KOLKATA NOIDA MUMBAI BANGALORE

190 Annual Report 2010-11

Sl. No. 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

Name of Teleport SENIOR MEDIA LTD. SHITAL FIBRES LTD. SKYLINE TELE MEDIA SERVICES PVT. LTD. SOWBHAGYA EXPORTS LTD. SRI VENKATESWARA BHAKTI CHANNEL PVT. LTD. SST MEDIA PVT. LTD. STV ENTERPRISES LTD. SUN TV LTD. SUN TV LTD. TATA COMMUNICATIONS LIMITED TATA COMMUNICATIONS LIMITED TATA COMMUNICATIONS LTD. VSNL TATA COMMUNICATIONS LTD. VSNL TATA COMMUNICATIONS LTD. VSNL TATA COMMUNICATIONS LTD., VSNL TATA COMMUNICATIONS LTD., VSNL TATA COMMUNICATIONS LTD., VSNL TATA SKY LIMITED TELEVISION EIGHTEEN INDIA LIMITED TELEVISION EIGHTEEN INDIA LIMITED TELEVISION EIGHTEEN INDIA LIMITED TV TODAY NETWORK LIMITED UNILAZER EXPORTS AND MANAGEMENT CONSULTANTS LIMITED USHODAYA ENTERPRISES LTD. VINTAGE STUDIO PVT. LTD. WINNING EDGE COMMUNICATIONS LTD.

Location NEW DELHI JALANDHAR NOIDA HYDERABAD TIRUPATI KOLKATA NEW DELHI CHENNAI CHENNAI CHENNAI-2 CHENNAI -3 CHENNAI -4 KOLKATTA COCHIN NEW DELHI MUMBAI CHENNAI NEW DELHI MUMBAI NEW DELHI NOIDA NEW DELHI MUMBAI HYDERABAD NEW DELHI HYDERABAD

Annual Report 2010-11 191

Annexure-V

List of pay channels

S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Name of the channel Zee TV Zee Cinema Cartoon Network Zee Marathi Zee News CNN Zee Caf Zee Studios Zee Bangla Zee Punjabi Zee Trendz HBO POGO Zee Business Zee Classic Zee Action Zee Premier Zee Telugu Zee Kannada ETC Punjabi ETC Zing Zee Jagran Zee Smile 24 Ghante 24 Taas Zee Talkies WB REAL S.No. 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Name of the channel Zee 24 Ghantalu Zee Salaam SET (Sony Entertainment Television) MAX Discovery Animal Planet AXN Animax TLC SAB TV SET PIX NDTV 24X7 NDTV Profit Aaj Tak Headlines Today Tez Channel 8 (Sony AATH) Discovery Science Discovery Turbo Neo Sports Neo Cricket SUN TV Gemini TV Udaya TV K TV Gemini Comedy Udaya Movies Sun Music Gemini Music

192 Annual Report 2010-11

S.No. 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89

Name of the channel Sun News Gemini News Udaya Varthegalu Gemini Movies Chintu TV (v) Udaya Comedy Kushi TV Chutti TV Udaya II Adithya TV Surya TV Kiran TV The Disney Channel Disney XD Hangama TV IBN 7 IBN Lokmat Colors MTV NICK VH 1 CNBC TV 18 CNN-IBN CNBC Awaaz Star Plus Star Gold Star Movies Star World Vijay TV NGC The Fox History and Entertainment Channel

S.No. 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121

Name of the channel Channel (V) Star One Times Now Zoom The MGM Star Jalsha Star Ananda FX FOX CRIME BABY TV Nat Geo Wild Nat Geo Adventure Nat GEO Music Suvarna ETV ETV 2 ETV Bangla ETV Marathi ETV Kannada ETV Gujarathi ETV Oriya ETV UP ETV Bihar ETV Urdu ETV Rajasthan ETV MP Bindass UTV Action World Movies UTV Movies Bloomberg UTV BBC World

Annual Report 2010-11 193

S.No. 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138

Name of the channel BBC Entertainment Cbeebies ESPN Star Sports Star Cricket Raj TV Raj Digital Plus Vissa TV 9XM 9X NDTV Imagine NDTV Lumiere NDTV Showbiz NDTV Good Times Firangi Sahara One Filmy

S.No. 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155

Name of the channel B4U Movies MAA TV MAA Music MAA Movies MAA Junior Dilli Aaj Tak E-24 Boomerang TCM Turner Classic Movies Tarang Tarang Music Prarthana ET NOW Ten Action+ Ten Sports Ten Cricket Asianet Plus

194 Annual Report 2010-11

Annexure-VI

List of Broadcasters / Aggregator

Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Particulars M/s Ushodaya Enterprises Pvt. Limited M/s ESPN Software India Private Limited M/s UTV Global Broadcasting Limited M/s Asianet Communications Limited M/s Raj Television Limited M/s Times Global Broadcasting Company Limited M/s Turner International India Private Limited M/s 9X Media Pvt. Ltd. M/s Turner General Entertainment Networks India Private Limited M/s New Delhi Television Limited M/s Sahara India Commercial Corporation Limited M/s Orissa Television Limited M/s MAA Television Network Limited M/s B4U Television Network India Limited M/s BBC World (India) Private Limited M/s TV Today Network Limited M/s Allied Infotainment Distribution Private Limited M/s BBC World Wide Channels Private Limited M/s Taj Television India Private Limited. M/s MSM Discovery Private Limited M/s Zee Turner Limited M/s SUN 18 Media Services North M/s SUN 18 Media Services South M/s Star Den Media Services Private Limited

Annual Report 2010-11 195

Annexure-VII

List of Pay DTH Operator

1. 2. 3. M/s. Tata Sky Ltd. M/s Dish TV India Ltd. SUN Direct TV (P) Ltd. 4. 5. 6. Bharti Telemedia Ltd. Reliance Big TV Pvt. Ltd. M/s Bharat Business Channel Ltd.

196 Annual Report 2010-11

LIST OF ABBREVIATIONS
2G 3G ADB ADC AGR Anatel, Brazil APT ARPU AS ATN AUSPI BARC BGP BSNL BSO BWA CAG CAPEX CAS CATV CDMA C-DOT CII CLIP CLS CMTS COAI CPGRAMS CPP CUG CUTCEF Second Generation Third Generation Asian Development Bank Access Deficit Charge Adjusted Gross Revenue Brazilian Agency of Telecommunications Asia Pacific Telecommunity Average Revenue Per User Autonomous System Action Taken Notes Association of Unified Service Providers of India Broadcasting Audience Research Council Border Gateway Protocol Bharat Sanchar Nigam Limited Basic Service Operator Broadband Wireless Access Consumer Advocacy Group Capital Expenditure Conditional Access System Cable Television Code Division Multiple Access Centre for Development of Telematics Confederation of Indian Industries Collar Line Identity Presentation Cable Landing Station Cellular Mobile Telephone Service Cellular Operators Association of India Centralized Public Grievances Redressal and Monitoring System Calling Party Pay Closed User Group Committee on Telecommunication Consumers Education and Protection Fund

Annual Report 2010-11 197

DEL DIT DLC DoT DTH EETT Greece EVDO FDI FLRIC FTA GMPCS GPRS GSM HITS ICT IETF ILD ILDO ILDO IMEI IN IP IPLC IPTV IPv6 ISP ISPAI ITeS ITU IUC LRN M/o I&B MDU

Direct Exchange Line Department of Information Technology Domestic Leased Circuits Department of Telecommunication Direct to Home Hellenic Telecommunications and Post Commission Evolution Data Optimized Foreign Direct Investment Forward looking Long Run Incremental Cost Free to Air Global Mobile Personal Communication System General Packet Radio Service Global System of Mobiles Head End in the Sky Informations and Communications Technology Internet Engineering Task Force International Long Distance International Long Distance Operator International Long Distance Operator International Mobile Equipment Identity Intelligent Network Infrastructure Provider International Private Leased Circuit Internet Protocol Television Internet Protocol version 6 Internet Service Provider Internet Service Providers Association of India Information Technology Enable Services International Telecommunication Union Interconnect User Charges Location Routing Number Ministry of Information & Broadcasting Multiple Dwelling Unit

198 Annual Report 2010-11

MIC Japan MLPA MNP MOU MSC MSO MTNL MVNO NDNC NGN NGN-Eco NGO NIC NIDQS NIXI NLD NLDO NNP NRRDA NTP NTRA, Egypt OBD OECD OFC OHD OPEX OTEF PCO PMRTS POI POP PSU QoS

Ministry of Internal Affairs & Communication, Japan Multi Lateral Peering Agreement Mobile Number Portability Minutes of Usages Mobile Switching Centre Multi System Operators Mahanagar Telephone Nigam Limited Mobile Virtual Network Operator National Do Not Call Registry Next Generation Network Next Generation Network Expert Committee Non-Governmental Organization National Informatics Centre National Integrated Directory Enquiry Service National Internet Exchange of India National Long Distance National Long Distance Operator National Numbering Plan National Rural Roads Development Agency New Telecom Policy National Telecom Regulatory Authority , Egypt Out Bound Dialer Organization for Economic Cooperation and Development Optical Fibre Cable Open House Discussion Operational Expenditure One Time Entry Fee Public Call Office Public Mobile Radio Trunked Services Point of Interconnection Points of Presence Public Sector Undertaking Quality of Service

Annual Report 2010-11 199

RIO SACFA SATRC SDCA SIM SMS SP SRS TAM TCEPF TDSAT TEC TRAI TRP TTO UASL UCC USL USOF USSD VAS VCC VOD VoIP VPT VSAT Wi-Fi WiMax WLL WPC WTO

Reference Interconnect Offer Standing Advisory Committee on Frequency Allocation South Asian Telecommunication Regulators Council Short Distance Charging Area Subscriber Identity Module Short Messaging Service Service Providers System Requirements Specifications Television Audience Measurement Telecommunication Consumers Education & Protection Fund Telecom Disputes Settlement and Appellate Tribunal Telecom Engineering Centre Telecom Regulatory Authority of India Television Rating Points Telecom Tariff Order Universal Access Service License Unsolicited Commercial Communication Universal Service Levy Universal Service Obligation Fund Unstructured Supplementary Service Data Value Added Service Virtual Calling Card Video on Demand Voice on Internet Protocol Village Public Telephone Very Small Aperture Terminal Wireless Fidelity World-wide Interoperability for Microwave Access Wireless in Local Loop Wireless Planning Coordination World Trade Organization

200 Annual Report 2010-11