Fri, 14 Oct 2011 Sibal rings in One India, one number
fe Bureau
Posted: Tuesday, Oct 11, 2011 at 0447 hrs IST
New Delhi: High on ideas, low on details. This is how the draft New Telecom Policy 2011 unveiled by telecom minister Kapil Sibal on Monday can best be described. Making the right noises, Sibal prefaced his new policy saying revenue generation will play a secondary role. So, out goes circle-specific licensing, mobile STD charges, national roaming charges and limited mobile number portability. In comes a single national telecom licence, which will enable consumers to keep the same mobile phone number even if relocating across the country. This will also ring in nationwide mobile number portability, which is currently restricted to circles. Since the concept of telecom circles goes out the door, mobile calls within the country — whether short distance or long — will cost the same. However, the new regime must wait, at least until December. During this time, the government will seek feedback on the policy draft from stakeholders and incorporate specific measures after recommendations from regulator Trai are sought and processed. In short, there are no specifics or deadline to the measures announced on Monday.
While lower charges are sure to cheer customers, the telecom industry may sulk. Reason: Around 7.5% of its revenues come from national roaming. What’s worse, there is nothing to reduce the industry’s revenue-share burden, which is now 6-10% depending on the circle — despite Trai and the DoT suggesting a uniform 6% and 8%, respectively.
However, not everything is gloomy for them. The industry is happy with the proposals on spectrum pooling, sharing and trading.
Further, Sibal’s promise of extra spectrum – 300 MHz by 2017 and 200 MHz more by 2020 – will increase spectrum availability and reduce price. “Directionally, it is a very good draft. It is a rounded, 360-degree policy direction. Not just for operators and operations, but the vendors, value-added services, mobile phone users and everyone in the sector,” Prashant Singhal, telecom analyst at Ernst & Young said. However, he added that the draft was silent on how the measures would be achieved or a timeline for the transition.
The NTP draft proposes another commendable move: de-linking licences from spectrum and making spectrum available through a market mechanism. This would mean that a single licence can be used to provide all kinds of telecom, IT and broadcasting services by buying the respective spectrum at market prices, preventing the possibility of Raja-type spectrum scams. Sibal also talked about making broadband available on demand.
Here too, the draft has fallen short of both the methodology and the timeline. Despite the broadband policy being in force since 2004, subscriber is still an abysmal 10 million. The root problem is the last-mile linkage monopoly of BSNL and Sibal has not said whether it would be made available for all operators. It’s unclear out how broadband growth can be achieved without any such measure.
Again, though delinking licences and spectrum and making the latter available through a market-determined mechanism is commendable, it is not clear from what point the operators will pay for the spectrum at market-determined rates – 4.4 Mhz or 6.2 MHz. This is an issue which has split the industry and Sibal’s draft is silent on this.
The draft has talked about an exit policy for operators who don’t find their services viable and want to bow out. However, once again the details are missing. Here the problem is bigger because the Trai has called for cancellation of 74 licences, which may want to exit. Most of these licences are also facing litigation and investigation by the CBI. It remains to be seen how Sibal manages to finally frame the contours of the exit policy.
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