The Nation Hopes for a Revolution through National Telecom Policy 2011

VoicenData Bureau
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The Indian telecommunications industry, which has the second largest position in the world, boasts of impressive developments in the last decade. With more than 600 mn wireless connections at the end of FY 2009-10, Indian telecom services have gone through major transformations-with the major policy decisions that had taken place with NTP 94 and NTP99.


Known for the world's lowest calling rates, the Indian telecom industry made its presence felt once it was opened for private participation in 1992. Of course a clearer picture was drawn when the government announced its motive of liberalizing the telecom sector with the National Telecom Policy resolution of May 13, 1994. This was followed by New Telecom Policy '99 (effective from April 1, 1999) which produced another set of guidelines clearly recognizing the need for strengthening the regulatory regime. Providing a boost to the investment climate, NTP99 also pushed the need of restructuring the departmental of telecom services to that of a public service corporation.


The telecommunication industry, which is one of the prime support services needed for rapid growth and modernization of various sectors of the economy, has undergone a process of change over the years through significant policy reforms; and now when there are counted days left for NTP 2011, VOICE&DATA takes a holistic look at the needs and desires of the industry.


































A Peek Into The Past: How 2010 Turned the Tables

The year gone by made the country and the whole world notice the enormity of the Indian telecommunication industry.

Last year saw call rates dropping to one paisa per second. The Telecommunication Tariff Order (TTO) 1999, issued by Trai, began the process of tariff balancing with a view to bring them closer to the costs. This, supplemented by Calling Party Pay (CPP), reduction in ADC and increased competition, resulted in a dramatic fall in tariffs. 2010 also saw the 2G spectrum auction scandal hitting the industry, leading to huge loss in credibility leaving analysts, experts, industrialists and common citizens yearning for more transparency and accountability.

As the time to unveil another NTP draws closer, there are apprehensions all over. Recently, the Union Minister of Communication and IT unveiled his action plan and promised to overhaul the deacde old telecom policy, “Eleven years have passed since New Telecom Policy 1999, and many changes have taken place thereafter. Action will be initiated to formulate a comprehensive NTP 2011, including the recognition of telecom as infrastructure and as an essential service.”

2011: What Next?

Is the question doing the rounds in the industry. The journey of the telecommunication industry from 1999 to 2011 has seen some defining moments that have been brought on by policies and government initiatives, and a close working relationship between public and private players. At a time when Indian telecom industry stands scarred post one of the biggest scams ever seen by the industry, the need for a policy which can facilitate and develop a world class telecom industry seems more pertinent than ever.

























The key issues to be covered under NTP 11 pertain to licensing, spectrum allocation, tariffs/pricing, linkage with rollout obligations, flexibility within licenses, spectrum sharing, spectrum trading, mobile virtual network operators, unlicensed bands as well as mergers and acquisitions. Security happens to be an inevitable part of the forthcoming policy . The 3 important factors that are being targeted while framing the new policy are reasonable revenue for the government, affordable services to users, and a robust growth of the sector.

There are also various suggestions that have come up from the industry. Asserting that spectrum is one of the key focus for future policies, Dr Subho Ray, president, Internet and Mobile Association of India (IAMAI) says, “Since radiowaves are a scarce natural resource, we feel that control and management of it should be taken out of the hands of a government department and given to a wider group within the government, and a watertight process which does not leave any room for individual discretion, should be put in place.”

Well, with so many key issues each of which are more or less equally important, it is tough to come down to common pointers . However, there are a plethora of demands that are being debated and discussed. As Rajesh Chharia, president, Internet Service Providers Association of India (ISPAI) says, “As a industry body we want that the government should give ISP the same push which it has given to the mobile sector when it was in a very bad shape. Here we are not saying that we should get financial support but a favorable atmosphere should be created so that investor feel secure and the Industry can focus on progress. One day we will find that broadband penetration will start the way our leaders are dreaming and every village will be getting on the network.”

Ray of IAMAI adds, “While revenue generation should not be the main goal of spectrum allocation, the mix of criteria should have a strong revenue outcome and other parameters such as subscribers (audited), services offered (unified license holders have to offer all the 'covered by' services; they currently do not offer VoIP although they have a license), rural coverage and general investment in infrastructure.”

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Deepak Halan, group business director, IMRB International says, “The USO body should be given the responsibility of laying down high speed fiber-to-the-kerb (FTTK) infrastructure to connect all villages and small towns. Estimated cost: `180-360 bn depending on whether aerial or underground.”

Also the associations, and the industry in general, feels that allocation of spectrum, monitoring of licensing conditions, and issue of licenses are all done by one department-this should be dis-aggregated. “To pave way for policy and regulation for whole IP networks, the NGN Era is one of the most significant changes that the government can bring in,” says Anil Prakash, secretary general, ITU-APT Foundation of India.

Agrees Satyen Gupta, president, ACTO, “It should encourage the deployment of NGN by removing all kind of restrictions on IP based network and enable the interconnection of PSTN and ISP networks.”

Understanding the Loopholes

There have been allegedly many loopholes that have cropped up due to the older telecom policies. Rectification of which can be an asset for NTP 2011. There were many discrepancies that were evident as in the case of license allocation. For Instance, due to the alleged unevenness in NTP 1999, Reliance Infocomm had gained unlimited mobility. As late as 2003, the company was asked to pay a whooping penalty of `495 crore.

As Ray of IAMAI says, “NTP 94 and NTP99 both left discretionary powers on spectrum allocation and weak enforcement of licensing norms-these areas should be strengthened.”

Interestingly some experts feel that implementation was the biggest loophole in the previous NTPs. As K Krishna, CTO and head, marketing enterprise, Hughes Communications says, “The biggest negatives of the NTP99 is its implementation. A number of areas are not implemented and nobody in particular ever monitored that. There needs to be accountability in terms of the implementation of the NTP.”

The much hyped 2G-scam further clarified that NTP 1999 was taken undue advantage of by the former telecom minister, A Raja when he issued 163 new telecom licenses. The licenses were given under the 'First come, First Serve' basis.

“Coordination between all government department is one major drawback. Lack of it is causing poor penetration of broadband in our country, otherwise, education, health, information & broadcasting, finance and other segments can play a big role in increasing penetration of broadband in our country, which will directly effect GDP growth,” says Chharia of ISPAI.

The upcoming policy should attempt to correct the shortcomings as well as distortion of the earlier policies specially the 'broadband policy 2004' by removing existing bottlenecks in access such as the non-unbundling of the local loop, less availability of unlicensed spectrum... Rajan S Mathews, director general, COAI says, “ In spite of being the second largest telecom market in the world, telecom equipment manufacturing in India is yet to take off and the repercussions of this delay are now being felt. The growing demand and impetus from the government will surely result in boosting the manufacturing of telecom infrastructure in India.”

The Next Gen Telecom Policy

Providing due stimulus to the implementation aspects of the policy and plans should be the focus of the New Telecom Policy, feels the industry. The policy should encourage establishment of a' national broadband backbone' through the PPP route by utilizing existing infrastructure of all government and private players, USO fund to fill the missing links and through autonomous management by professionals who are the best brains in the industry.

Utilizing the existing regulatory resources more effectively, the regulation should concentrate on the areas of market failures through need-based 'differential regulation' and should not treat all service providers through a symmetric regulation. Necessitating a relook into the existing policy framework, the government, as promised by the telecom minister, should work on providing the best networking resources to empower the aam aadmi.

Hopefully, the new National telecom Policy 2011 will meet the expectations of the industry and will be successful in setting new user paradigms.

Archana Singh