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RoW Hurdles: Key issues faced by the telecom industry

July 01, 2013

Securing right of way (RoW) is a key issue faced by telecom operators while setting up the cable network. The procedural issues and costs involved in securing RoW clearances from multiple agencies have resulted in high expenditure, delayed investments, longer roll-out schedules and poor quality of service, which is impeding telecom infrastructure development.

These factors have become a key hindrance to operators’ plans of strengthening the optic fibre cable (OFC) infrastructure. There are two aspects to the issue of RoW – policy and cost related. These are as follows:

Lack of uniform policy and procedures

There is no uniform national policy for securing RoW clearances and in this scenario, local civic authorities and state governments formulate their own RoW policies which vary in terms of taxes and levies, safety aspects and procedures for granting permission.

Therefore, securing RoW for an operator has become a lengthy and complicated process as it involves studying the local rules, abiding by the terms and conditions specified by the state and local authorities, and receiving clearances from multiple agencies. In the absence of any time limit to grant such permissions under the Indian Telegraph Act, 1885, service providers often face major delays in securing RoW clearances.

Further, there have been several instances wherein an operator has sought RoW over a private property and the local authorities have levied charges on it. The local authorities’ powers in applying such charges need to be limited to only properties controllled or managed by it and the state governments should take appropriate measures to ensure strict compliance in this regard.

 High and varying costs

The charges levied on operators for laying a cable network vary across the country and are very high in metros, where the demand for broadband services is the highest. On an average, RoW charges in metros range from Rs 750,000 per km in the Delhi service area to Rs 10 million per km in the Mumbai circle. In rural areas, this cost varies from Rs 50,000 per km to Rs 100,000 per km.

Considering the high RoW costs, the government has provided free RoW to Bharat Broadband Network Limited (BBNL), which is setting up the 500,000 km National Optical Fibre Network (NOFN). The network would be used by private as well as public operators to provide last mile services in rural areas.

However, high RoW costs continue to be a key concern for operators that are looking to expand their networks in cities and towns where municipal authorities consider it a key source of revenues.

 The way forward

As the country is expected to witness the next phase of telecom revolution in terms of broadband growth in the near future, there is an urgent need to streamline the legal procedures and charges for obtaining RoW clearances. This is important because, unlike voice infrastructure, broadband infrastructure will need a larger and stronger cable backbone network.

As part of its recommendations on the telecom infrastructure policy in 2011, the Telecom Regulatory Authority of India (TRAI) has stated that issues related to RoW need an early resolution to ensure continued investments in the sector and allow timely creation of modern telecom infrastructure. TRAI has further stated that the government should fix and notify RoW charges in consultation with the state governments on a priority basis and ensure time-bound availability of RoW for telecom service providers.

In this regard, the model followed by the government to allow RoW for setting up the NOFN can be developed further. Under this project, all states and union territories have signed an agreement with BBNL to provide RoW and appoint a nodal officer or department for coordination. Several related issues are likely to be addressed if a similar system is introduced for granting RoW to private telecom operators.

 
 

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