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Telecom Services

Economic Survey 2001-2002 Upbeat About Telecom Reforms

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Voice&Data Bureau
New Update

The Economic Survey 2001-2002 which was presented before the parliament appreciates the pace of reforms in the last financial year. It puts the total new phones, both landline and wireless, at 7.8 million (5.9 million by BSNL & MTNL and 1.8 million by private sector). The total telephone connections, according to the survey as on March 31, 2001 were 36.3 million comprising 32.4 million fixed lines provided by BSNL & MTNL and 0.3 million fixed lines and 3.6 million cellular connections by the private sector.

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According to survey, during the period August 1991 to August 2001, 749 proposals of foreign direct investment (FDI) of Rs. 53,134 crore were approved and the actual flow of FDI during the above period was Rs. 7,028 crore. In terms of approval of FDI, the telecom sector is the second largest after energy sector, says the survey. In the year 2001, there has been a notable increase in the FDI inflow, which is of the order of Rs. 3,608 crore during January to September 2001.

Highlights: Policy in the Telecom Sector



Key Policy Developments

  • National long distance service opened up for unrestricted entry.

  • Termination of monopoly of VSNL for International Long Distance (ILD) services has been preponed to March 31, 2002 from March 31, 2004.

  • 25 new Basic Service License Agreements signed by private operators.

  • Fourth cellular operator, one each in four metros and thirteen circles has been permitted with seventeen fresh licenses issued to private companies in September/October 2001.

  • Wireless in Local Loop (WLL) has been introduced for providing telephone connections in urban, semi-urban and rural areas promptly.

  • Disinvestments of VSNL is underway.

Other Policy Initiatives

  • Sanchar Sagar project being executed through ‚DWDMâ„¢ Technology to meet the bandwidth demand of IT sector.

  • Asynchronous Transfer Mode (ATM) being introduced in 8 cities for high-speed data transmission.

  • VSNL has developed its capacity to provide international bandwidth on demand.

  • HTL disinvestments completed.

  • License conditions for Global Mobile Personal Communications by Satellite (GMPCS) have been finalized on November 1, 2001.

  • Policy for Voice mail /Audiotex service was announced in July 2001 by incorporating a new service called i.Unified Messaging Services.

  • ISPs have been permitted for setting up of Submarine cable landing station for international gateways for Internet.

  • Thirteen ISPs have been given clearance for commissioning of international gateways for Internet using satellite medium for 29 gateways.

  • 16 companies are operating Public Mobile Radio Trunked Service (PMRTS) started in 1995 in 25 cities. Policy for PMRTS in terms of NTPâ„¢ 99 has been announced on November 1, 2001 under which fresh licenses will be granted only in digital technology.

  • National Internet Backbone (NIB) has been commissioned. of license fee based on revenue share in place of fixed license fee to be paid upfront.

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New Initiatives in Telecom Regulation

In 2001-02, regulatory initiatives were taken relating to increased competition, tariff policies, Quality of Service (QOS), Consumer protection, and Universal Service Obligations (USO). Important amongst these are

  • Increasing competition in the market: TRAI provided recommendations to open up the market to competition and to introduce new services in the telecom sector. Recommendations were provided for opening the international long distance sector allowing the use of Voice Over Internet Protocol. The licensing terms and conditions for Cellular Mobile were simplified in order to encourage entry for operators in areas without effective competition. TRAI also addressed the issues relating to implementation of the National Long Distance (NLD) License regime, and provided its recommendations on the Carrier Access Code required for consumers to choose among NLD operators.

  • Universal Service Obligation: TRAI produced recommendations in respect of policy on Universal Service Obligations, which provide inter-alia for increase in access to telecommunications within rural areas as well as for increasing tele-density. A detailed scheme including arrangements regarding fulfillment of USO, its funding and administration has been provided. The regime is to be implemented by April 1st, 2002.

  • Tariff Policy: TRAI has been following a program of tariff re-balancing for the last three years. The last tranche of the current re-balancing exercise is likely to be implemented by the first week of April 2002. The tariff in respect of cellular phones has been monitored closely with a view to making it more consumer friendly and ensuring a level playing field for all operators.

  • Quality of Service and Consumer protection: Following upon the previously notified QOS Regulation for Basic Service and cellular Mobile Service, the TRAI initiated a widespread customer survey to ascertain the extent to which QOS is met in these sectors. The TRAI also issued a regulation on QOS for Dial up Internet Access Network.

Link: http://indiabudget.nic.in/es2001-02/chapt2002/chap94.pdf