In Spectrum sharing bonanza
The beleaguered telecom operators in the country have something to cheer. The Draft National Telecom Policy 2011 unveiled today bows to one of the industrys most persistent demands. The policy allows operators to earn revenue from their unused spectrum. The telecommunications minister Kapil Sibal, said the government would look at bringing legislation for governance of spectrum.
"We believe it is imperative to move towards convergence of telecom, broadcast and IT services, networks, technologies and overcome all existing segregation of licensing, registration and regulatory mechanisms with the objective of enhancing access and reduce costs," Sibal said while unveiling the draft of the new policy.
We will seek TRAI (Telecom Regulatory Authority of India) recommendations on new licences, migration to new licences and exit policy, Sibal said. Revenue generation will play a secondary role, he added. It is believed that Spectrum sharing and pooling should help late entrants gain a firmer foothold on the market. It will also help the older players to recover some of the high cost that they have paid for Spectrum.
As the market is crowded with too many players, the government would also bring an exit policy.
Ambitious targets
Kapil Sibal said the government was targeting 175 million broadband users by 2017, and increasing this to 600 million by 2020. Sibal also said that his ministry was targeting increasing rural tele-density from the current 35 per cent to 60 per cent by 2017 and completely covering rural areas by 2020.
Another key target of the new policy is to make India a global hub for telecom equipment manufacturing and would encourage research and development (R&D) and product development in telecom. The Government will form Telecom Finance Corporation, which will facilitate investment in telecom sector.
According to telecommunications ministry, the domestic demand is estimated to be of the order of Rs 2,50,000 crore by the end of 12th Five Year Plan (2012-2017). The new policy has proposed to create a corpus to promote indigenous research and development, creation of intellectual property right, entrepreneurship, manufacturing, commercialisation and deployment of state-of-art telecom products and services during the 12th Five Year Plan Period.
To address the strategic and security concerns of the country, Sibal said the government will provide preferential market access for domestically produced telecommunication products, including mobile devices, SIM cards etc. The government will a special emphasis on domestically made products for which intellectual property rights reside in India.
Indian telecom manufacturers are set to get incentives as the government has set an ambitious target of meeting 80 per cent of local requirement by 2020 by promoting the domestic production. While unveiling the draft NTP, Kapil Sibal said, Important milestone is to promote the domestic production of telecommunication equipment.... to meet 80 per cent of the Indian telecom sector demand through domestic manufacturing with value addition of 65 per cent by 2020.
No more roaming charges
Even ordinary users have reason to cheer the new telecom policy that proposes to remove roaming charges for subscribers within the country. However, this move can have an adverse impact on the revenues of operators. Currently roaming charges account for almost 8 percent of the revenue of an operator. As there will be a one nation scheme the distinction between local calls and STD calls will vanish.
Having the same tariff across the country is definitely going to impact revenues of cash-strapped operators. Experts believe that abolition of roaming charges is going to impact the incumbents more than the newer operators.
The NTP 2011 also seeks to enhance the scope of the highly popular Mobile Number Portability (MNP) system. Currently, MNP is only allowed within circles. Now it will be enhanced to allow consumers to retain their mobile numbers even when they move to a new city or a location in the country without having to pay 'roaming charges'. The policy also seeks to exponentially increase broadband availability and speed.
The draft of the National Telecom Policy, 2011 has been placed on the website of the Department of Telecommunication for public discussion. On the basis of comments received the government will announce the final policy in December this year.
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