What draft of new Telecom Policy have it for common people?

October 11, 2011   ·   0 Comments

Telecom users will be able to avail free roaming and keep their phone numbers even if they switch service providers anywhere in the country, as per the draft New Telecom Policy unveiled by the government .  The distinction between local and STD calls would vanish, as the policy aims at a ‘one-nation-one-licence’ regime.

Telecom operators would not require separate licenses for operations in various parts of the country and a single license would suffice.

www.stockssavvy.comWhat this means for Telecom service Providers:

While consumers will applaud the move to do away with , industry will suffer. Sibal also did not announce a system akin to one-nation, one-rate for telecom companies, which pays a revenue-share licence fee ranging from 6-10% depending on circles. Roaming charges account for 8% of cellular operators revenue. This move of removing roaming charges will effect the telecom companies negatively.

Spectrum allocation would be delinked from licenses and radio waves would be made available at market-determined prices.  As the market is crowded with too many players, the government would also bring an exit policy. This move could eventually lead to consolidation in an industry where more than a dozen players compete, keeping tariffs and margins low.

The new policy aims to provide on demand broadband for all citizens and increase rural tele density to 100% by 2020. Sibal said that special focus will be on rural and remote areas and the new policy would have a framework to make more spectrum available.

The policy will focus on convergence of TV, internet and internet services. Broadband download speed will be revised to 512 kbps vs 256 kbps. Sibal said that the government will audit the use of spectrum.  Sibal said that the policy aims to make India a hub for telecom equipment manufacturing and will have provisions to create a corpus for R&D, IPR and entrepreneurship.

Cellular Operators Association of India (COAI) is of the opinion that the Draft Telecom Policy addresses all issues and concerns of the telecom sector. Mobile service providers would also benefit from the policy as it proposes to allow companies to pool, share and later trade spectrum. The minister also 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. “Revenue generation will play a secondary role,” he added.

Sibal also said that his ministry was targeting increasing rural tele-density from the current 35 percent to 60 per cent by 2017 and completely covering rural areas by 2020.

Broadband penetration is another key thrust area for the new policy. The minister said the government was targeting 175 million broadband users by 2017, and increasing this to 600 million by 2020. The final telecom policy will be announced by December.

Highlights of draft National Telecom Policy 2011:

  • Draft NTP targets increase in teledensity to 60 per cent by 2017 and 100 per cent by 2020.
  • Draft NTP aims for ‘one nation-one licence’; targets full MNP and free roaming.
  • Draft telecom policy delinks spectrum from licence; radiowaves to be made available at market price.
  • Revenue generation for government will have secondary role under draft NTP.
  • Will make 300 MHz of spectrum available by 2017 and another 200 MHz by 2020.
  • Will seek Trai’s recommendations on new licences, migration to new licences and exit policy for NTP-2011.

Telecom Minister unveiled the draft Monday, floating several big ideas but providing few details or timelines for implementation. An estimate says that it can take as long as 2014 to get this draft implemented.

Food for thought: Docommo will have to take out their advertisement where Ranvir Kapoor explains the fear of roaming in humorous way

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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