TRAI increases Minimum Wired Broadband Speed to 2 Mbps; Suggests License Fee Exemption

On Tuesday, the Telecom Regulatory Authority of India revised the minimum download speed of wired broadband to 2 Mbps. TRAI also suggested other incentives such as license fees exemption for broadband companies, and so on.

What Changed?

TRAI has sent the recommendations, that span 298 pages, to the DoT, which will act upon them accordingly. In a statement, TRAI said, "definition of broadband has been reviewed and the minimum download speed for broadband connectivity revised upward from the present 512Kbps to 2Mbps. Based on download speed, fixed broadband has been categorized into - Basic, Fast and Super-fast". The regulator has defined the plans as such:

• Basic Broadband: This plan will deliver broadband download speeds between 2 Mbps and 50 Mbps to a user.
• Fast Broadband: This broadband connection with deliver download speeds between 50 and 300 Mbps.
• Super-fast Broadband: A user with this connection will get download speeds above 300 Mbps.

TRAI noted that the current broadband penetration in India is at about 55%. For context, China has a 95% broadband penetration, while the EU has about 95-115%. What's more, India only has about 1.69 wired broadband connections per 100 people; that compares rather unfavorably with France's 44.6 and Korea's 42.8.

And not just the fixed broadband; despite all the growth, India's global ranking in mobile broadband penetration is concerning. India's proliferation stands at 53.45 per 100 individuals; Japan has 182.4 and the US has 151.6. Internet speeds are also a cause of concern for India, too. TRAI's latest move addresses that, at the very least.

V Raghunandan, Secretary, TRAI, said, "reliable and affordable high-speed broadband connectivity is very much essential to achieve the goal of digital empowerment and improved well-being of the people of India".

TRAI Suggests DPT Programme to Drive Usage

In its list of recommendations, that incredibly ran for 298 pages, the regulator detailed out plans for increasing rural connectivity. It also suggested a pilot Direct Benefit Transfer programme to promote usage among rural users.

TRAI said, "for the pilot scheme, the government should consider reimbursing 50% of the monthly fixed-line broadband subscription charges, subject to not more than Rs. 200 per month per subscriber, to each rural fixed-line broadband subscriber through DBT platform".

TRAI suggested that DoT can work out the details after it has established the practicality of such a scheme.

Incentive Programme for Wired Broadband Companies

TRAI also suggested an incentive programme for fixed-line broadband service providers. It said, "initially, the proposed incentive, that is, license fee exemption, to the eligible licensees should be allowed for a minimum period of five years. The need for incentives beyond initial five years may be reviewed in the fifth year keeping in view the policy priorities and technological developments at that point of time". Notably, the companies pay 8% of their AGR as license fee for providing wired broadband services.

TRAI has left it to the companies to self-assess their eligibility for such as scheme. It added that to verify the self-assessment, authorities will require a “robust verification mechanism”. TRAI further said, “for any licensee to avail the proposed incentives, a net increase of minimum 15% in working fixed-line broadband subscribers on year-on-year basis in the respective License Service Area (LSA) should be the eligibility criterion".

"But minimum 20% of the targeted increase in number of working fixed-line broadband subscribers in the current quarter in the respective LSA should be achieved through net increase in the rural fixed-line broadband subscribers in that LSA," it added.

Further, the regulator said, “provided further that the condition regarding net increase in the rural fixed-line broadband subscribers mentioned above should not be made applicable in Delhi, Mumbai, and Kolkata service areas. Provided also that in-line with the License Fee (LF) payment obligations of licensees, the eligibility of individual licensees for incentives should also be assessed on quarterly basis".

The regulator also said that to ensure growth, licensees will have to meet subscriber increase targets. TRAI said that the companies will have to meet such targets in smaller cities, towns and rural areas; this will ensure that the growth spreads evenly across the country. Also, the regulator said, “the incentive for eligible licensees should be given in the form of LF exemption on the total revenue".