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New Draft National Telecom Policy 2011 Highlights!

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Before we get into the details, sample an interesting piece of information. The existing telecom policy framework in the telecom sector has been in place since 1999. Cut to today and the telecom sector has possibly changed completely which begs the question as to why the policy revision does not happen with the market dynamics. 

Well, telecom sector sure is expected to witness a massive revision which is expected to help the sector wade through tough waters.

Communications Minister Kapil Sibal is set to unveil the draft National Telecoms Policy 2011 and based on the highlights covered by ET, sounds promising to say the least.

Here are the some of the highlights of the new proposed draft National Telecoms Policy 2011.

Key Targets

  • Create knowledge based society through proliferation of broadband – provide ‘broadband on demand’ by 2015. Achieve target of 175 million broadband users by 2017 and 600 million by 2020.
  • To promote R&D & product development in telecom
  • To make India a global hub for telecom equipment manufacturing
  • Increase rural tele-density from 35% to 60% by 2017 and to 100% by 2020.
  • 80% of telecom networks to be domestically manufactured by 2020

My Comments: Haven’t we heard these before! Well, ambitious targets but one wonders how much of this is achieved. As for increasing domestic share of equipment manufacturing, TRAI has put an incentive plan to drive the use of locally made telecom equipment

Making Telecom Service More Consumer Friendly

  • Abolish roaming charges
  • Mobile Number Portability, which is currently restricted to a circle-level basis, to be enhanced to allow consumers to retain their mobile numbers when they move to a new city or any location in the country without having to pay ‘roaming charges’.
  • Strengthen grievance redressal mechanisms
  • Broadband speeds to be revised to 512 kbps & further to 2 Mbps by 2015 & 100 Mbps by 2020
  • Regulator to enhance consumer awareness on tariffs, services
  • Strengthen consumer protection act

My Comments: Oh, lots to cheer about for the Indian telecom consumer- on paper atleast. From no roaming charges ,MNP across different locations, and improved broadband speeds, it all sounds great. However, one wonder what the * (conditions apply) says. Fair Usage Policies (FUP) on broadband, pathetic support for MNP are only some of the issues that stand in the way of making telecom services beneficial for the customers. Oh wait, there is a plan for a better grievance redressal mechanism. Based on the twitter mentions for various telecom service brands, we sure can use one

Flexible Spectrum Allocations

  • Free up 300 MHz of airwaves for commercial telephony by 2017 & another 200 MHz of spectrum by 2020
  • All future spectrum allocations will be priced at market rates
  • Allow spectrum pooling, sharing & trading
  • Prepare a roadmap for spectrum availability for next 5 years
  • Reserve small amounts of spectrum in certain frequencies for indigenous development of products & technologies
  • Enact ‘Spectrum Act’, to deal with all issues connected with mobile permits, including re-farming, pricing of this resource, withdrawal of allotted spectrum and norms for sharing and trading.
  • To promote use of white space with low power devices

My Comments: I really don’t understand the spectrum market but even as the policies hint at making the process more transparent and flexible, implementation of these will decide the fruit these revisions will bear

Mobile Segment Entry & Exit Policies

  • To frame an exit policy for new entrants to surrender their mobile permits & airwaves
  • Delink license from spectrum. Make mobile permits technology neutral and divide them into 2 categories – Network Service Operator & Service Delivery Operator
  • Allow sharing of networks
  • Regulate value added services, especially the carriage charge
  • To provide clear rules for renewal of all mobile permits
  • To put in place legal, regulatory and licensing framework for convergence of services, networks and devices
  • Move towards an unified licensing regime that will allow operators to offer any service
  • Address the Right of Way issues in setting up of telecom infrastructure
  • Relaxed M&A norms to allow consolidation

My Comments: We have all seen the addition of new operators ever since government opened up the telecom sector. Going by current state of telecom operators cutting jobs, better M&A norms and exit policies could come in handy by driving consolidation in the sector. Regulation of VAS prices also sounds interesting though i am not sure if they will be taken too positives by operators

Telecom infrastructure issues

  • Recognizing telecom as infrastructure sector
  • Facilitate increased use of green tech for powering towers
  • Reducing carbon footprint of telecom sector

My Comments: A welcome move for sure especially when it comes to promoting green technology in the sector. However i wonder if recognizing telecom as infrastructure will mean that more investments flow into the telecom sector as part of the infrastructure budgets

Honestly, the government has set hefty targets – I would be glad even if we achieve half of it within the stipulated time frame. Like we have mentioned earlier – the telecom sector is sure to oppose some aspects of this policy like free roaming charges, which will essentially hit their bottom-line. However, all in all this is a great draft framework proposed by the government and one which will benefit Indian telecom users quite a lot!

What’s your opinion on these new policy changes?

  1. The policy should help the growth of BSNL& MTNL also.

  2. Giridhar V Gatte says

    Sounds good, as always lets see how the execution goes..

  3. Bala Kumar N says

    BB speed 512 :> whooo whooooo….. when our govt. will enforce… :)

  4. Santosh Kumar says

    Best one is the reservation for spectrum for indigenous manufacturing and development of product and technologies. Next best is d roaming free for all over india and last one is MNP in inter circle…GOOD TELECOM POLICY….Lets hope now that there is no corruption further ahead…

  5. Titash Roy Chowdhury says

    By what time will be see this policy come into effect? Did they mention any deadline?

    1. Arun Prabhudesai says

      No deadline given as yet – but it will be discussed in the winter session of the parliament and then will get passed….

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