NEW TELECOM POLICY, 2011

[Mr. M. GOVINDARAJAN]

 The Central Government framed the New Telecom Policy, 1994 which emerged due to liberalization and globalization policy adopted by the Government. This policy aimed at opening up telecom services segment for private operators. Tele-density was just 0.8 and hence it sought to provide telephone on demand by 1997. The private operators entered into the telecom sector.  But the target of covering all villages by 1997 is not yet achieved.   New Telecom Policy 1999 was formulated with the aim to make telecom sector more investment friendly. It offered a migration path to operators from fixed licence fee to revenue share. This policy is the huge success.  It laid the foundation for explosive growth in telecom sector especially in mobile wing. Over all tele-density moved to 74.5. The lack of clarity on spectrum allotment led to chaotic decision making.  The connections and rural areas and broadband development are still remains concern areas.

The Central Government formulated New Telecom Policy 2011 for the telecom industry.  It is an initiative to create a policy framework to address the sustained adoption of technology in education, health, employment generation, financial inclusion etc., It endeavors to create an investor friendly environment for attracting additional investments.

The vision of the policy is to provide to the people of India, secure, reliable, affordable and high quality converged telecommunication services anytime, anywhere. Some of the following featured objects of the policy are as follows:

To provide high quality, affordable and secure telecommunication services to all citizens;

To increase rural density from the current level of 35 to 60 by the year 2017 and 100 by the year 2020;

To provide affordable and reliable broadband on demand by the year 2015 and to achieve 175 million broadband connections by the year 2017 and 600 million by the year 2020 at minimum 2 Mbps download speed and making available higher speeds of at least 100 Mbps on demand;

To provide high speed and high quality broadband access to all village panchayats through optical fiber by the year 2014 and progressively to all villages and habitations;

To create corpus to promote indigenous R&D, IPR creation, entrepreneurship, manufacturing, commercializing and deployment of the state of the art telecom products and services during the 12^th five year plan period;

To promote the domestic production of telecommunication  equipment to meet 80% Indian Telecom sector demand through domestic manufacturing with a value addition of 65% by the year 2020;

To achieve ‘one Nation – Full Number Mobile Portability’ and work towards ‘one nation – free roaming’;

To facilitate consolidation in the converged telecom service sector while ensuring sufficient competition;

To protect consumer interest by promoting informed consent, transparency and accountability in quality of service, usage, tariff etc.,

To strengthen the grievance settlement mechanisms to provide timely and effective resolution;

To evolve a framework for financing the sector and streamlining taxes and levies for long term sustainability of telecom sector;

To achieve a substantial transition to new internet protocol (IPv6) in the country in a phased and time bound manner by 2020 and encourage and eco system for provision of a significantly large bouquet of services on IP platform;

To strengthen the institutional, legal and regulatory framework and re-engineer processes to bring in more efficiency, timely decision making and transparency.

The Government formulates various strategies to achieve the objectives.  It is expected that new policy will take the country into the next stage of inclusive growth. 

The telecom service sector is reeling under the multiple impact of the 2G spectrum scam, falling revenues for the operators and the resulting tariff hike.  The new policy comes at the correct time.  This is an attempt to bring the telecom sector back on track.  But it is silent as to when and how the proposals in the policy will be implemented.

The biggest gain is to the travelers round the country.  There will be no roaming charges.  It will make the operators to face loss of revenue but it may be expected high usage which will certainly meet out the loss.  The other major gain for the consumers will be on the proposal to allow unrestricted internet telephony.  This will allow the subscribers to use the internet to make local and STD calls to a fixed or mobile user.  Under the existing rules, consumers are allowed to make only PC – PC calls on the internet.

The new policy brings relief to some extent to the operators in terms of permitting them to share and trade spectrum.  This will cause new stream of revenue but also to utilize the spectrum efficiently and effectively.   This policy also talks about the periodic audit of spectrum to monitor efficient utilization.  It proposes to enact Spectrum Act to establish to Spectrum Management Commission which will subsume Wireless Planning Coordination wing of the Department of Telecom and will have wider powers including settlement of disputes, pricing and regulations related to spectrum.

The new policy also envisages giving infrastructure status to the telecom sector, which has contributed nearly 3% the national GDP in the past decade.  This could result in tax breaks for the operators.   This policy promotes indigenous R&D, innovation and manufacturing to reduce dependency on imports and enhance the exports.   It moves towards unified licensing with the proposed one nation one licence regime.

This progressive policy covering all aspects of telecom industry will not only move the telecom industry forward in India but also positions India’s telecom sector in a global leadership position.  To achieve the objectives proposed in the policy may take 10 years. The Government should fix a time frame to achieve the said objectives in the policy.  The plans to achieve these objectives are also to be formulated by the Government. The Government is also to clear the present 2G chaotic scene.