Telecom policy sets bar higher
Friday, Jun 1, 2012, 8:46 IST | Place: Mumbai, New Delhi | Agency: DNA
The new policy is set to take India from voice to data with emphasis on broadband penetration and making spectrum technology-agnostic, meaning the operators have been allowed to provide any service on technology and on any device.
It’s finally out. The National Telecom Policy – 2012 (NTP-12) was cleared by the government on Thursday, paving the way for free roaming, country-wide mobile number portability (MNP), liberalised spectrum, pan-India operator licences, technology-agnostic spectrum and a host of other policy announcements that are expected to take the Indian telecom sector to the next level of revolution.
The new policy is set to take India from voice to data with emphasis on broadband penetration and making spectrum technology-agnostic, meaning the operators have been allowed to provide any service on technology and on any device.
It has also increased the broadband speed to minimum of 2 megabit per second. However, it will be a while before all measures are enforced as the government has yet to work out the modalities of implementing it.
The government has also delinked licences from spectrum, which earlier came bundled. Though, most industry players and experts feel there are several grey areas that are needed to be clarified and that the objectives set by the government would be realised only on effective implementation.
“The telecom policy is in line with the tone of international telecom policies. However, it will not solve the innate problems facing the telecom sector like spectrum allocation, M&As (merger and acquisitions), consolidation, etc. It is not a particularly actionable and implementable document – just a statement of facts that’s not specific and doesn’t suggest the next step of action,” said Mahesh Uppal, director, Com First (India).
He does not expect it to impact operators in a major way. “The question to be asked is how and when these goals will be implemented,” questioned Uppal.
Rajan Matthews, director-general, COAI, speaking on behalf of the GSM players, said most of the industry demands have been included in the policy, however, it had to be seen how they were put in place.
“Now, we will work with the government, to ensure that the telecom industry which contributes significantly to the GDP is not milked like a cash cow. We support liberalisation of spectrum, but want to know how the government will proceed on it. Roam-free is very complicated – and requires careful action and protocol, in terms of issues related to pan-India numbering, roaming, network and legal enforcements, in terms of local legal procedures of individual states,” said the spokesperson for GSM operators.
He demanded that additional levies and taxes should be slashed.
Rohit Chordia, senior analyst with Kotak Securities, believes the new law on MNP and free roaming may not necessarily result in more cases of MNP, but will definitely bring in an arbitrage opportunity for subscribers by allowing them to keep switching to better tariff plans of different operators, depending on which state they are in.
“While this will no doubt impact operators, they will find a way to pass on the costs to the end-consumers. Thus, subscribers will not have to think twice before making an STD call – which could positively impact volume growth,” he said.
An important aspect of the policy is that it encourages local production of devices and will soon be coming out with electronic manufacturing policy.
“(The policy envisages to) provide preferential market access for domestically manufactured telecommunication products including mobile devices, SIM cards with enhanced features, etc. with special emphasis on Indian products for which IPRs reside in India to address strategic and security concerns of the government, consistent with international commitments,” said the statement issued by the government.
Sandeep Girotra, region head, India, Nokia Siemens Networks, said such a move will boost indigenous device manufacturing.
“As a specialist in mobile broadband, we remain committed towards working with telecom operators to further increase teledensity, enhance customer experience and empower communities,” he said.
Hemant Joshi, Partner, Deloitte Haskins & Sells said since the NTP-12 is going to make roadmap for availability of spectrum every five years, it would result in appropriate allocation of spectrum and also help operators design network and technology adoption keeping in view the availability of spectrum.
“NTP also envisages licence and technology neutral spectrum allocation, which is step in right direction considering evolving efficient technologies. In terms of abolishment of roaming charges, this would be negative in short term for operators as they would lose roaming revenue. However, in the long run as usage would increase with no roaming charges it might offset the revenue loss caused to the operators’ said Joshi. As for the single all-India licence, he said, same is likely to be beneficial for pan-India operators as they would be required to maintain one set of book and also number of compliances would reduce significantly.
In a move that will clip the Telecom Regulatory Authority of India’s (Trai) wings to some extent, the government clarified it would not have policy-making powers and would operate solely as a regulator.
G Krishna Kumar, a wireless professional based in Bangalore, warns the NTP-12 should not go the 2004 broadband policy way.
“The 2004 broadband policy envisioned 20 million broadband subscribers by 2010, but in reality less than half was achieved. We need the right infrastructure and a solid ecosystem for the goals of NTP to be achieved,” he said.
He expected the penetration of broadband to boost economic growth. “It is established that broadband contributes to increase in GDP. Every 10% increase in broadband contributes to 1.4% increase in GDP.
The new policy is set to take India from voice to data with emphasis on broadband penetration and making spectrum technology-agnostic, meaning the operators have been allowed to provide any service on technology and on any device.
It has also increased the broadband speed to minimum of 2 megabit per second. However, it will be a while before all measures are enforced as the government has yet to work out the modalities of implementing it.
The government has also delinked licences from spectrum, which earlier came bundled. Though, most industry players and experts feel there are several grey areas that are needed to be clarified and that the objectives set by the government would be realised only on effective implementation.
“The telecom policy is in line with the tone of international telecom policies. However, it will not solve the innate problems facing the telecom sector like spectrum allocation, M&As (merger and acquisitions), consolidation, etc. It is not a particularly actionable and implementable document – just a statement of facts that’s not specific and doesn’t suggest the next step of action,” said Mahesh Uppal, director, Com First (India).
He does not expect it to impact operators in a major way. “The question to be asked is how and when these goals will be implemented,” questioned Uppal.
Rajan Matthews, director-general, COAI, speaking on behalf of the GSM players, said most of the industry demands have been included in the policy, however, it had to be seen how they were put in place.
“Now, we will work with the government, to ensure that the telecom industry which contributes significantly to the GDP is not milked like a cash cow. We support liberalisation of spectrum, but want to know how the government will proceed on it. Roam-free is very complicated – and requires careful action and protocol, in terms of issues related to pan-India numbering, roaming, network and legal enforcements, in terms of local legal procedures of individual states,” said the spokesperson for GSM operators.
He demanded that additional levies and taxes should be slashed.
Rohit Chordia, senior analyst with Kotak Securities, believes the new law on MNP and free roaming may not necessarily result in more cases of MNP, but will definitely bring in an arbitrage opportunity for subscribers by allowing them to keep switching to better tariff plans of different operators, depending on which state they are in.
“While this will no doubt impact operators, they will find a way to pass on the costs to the end-consumers. Thus, subscribers will not have to think twice before making an STD call – which could positively impact volume growth,” he said.
An important aspect of the policy is that it encourages local production of devices and will soon be coming out with electronic manufacturing policy.
“(The policy envisages to) provide preferential market access for domestically manufactured telecommunication products including mobile devices, SIM cards with enhanced features, etc. with special emphasis on Indian products for which IPRs reside in India to address strategic and security concerns of the government, consistent with international commitments,” said the statement issued by the government.
Sandeep Girotra, region head, India, Nokia Siemens Networks, said such a move will boost indigenous device manufacturing.
“As a specialist in mobile broadband, we remain committed towards working with telecom operators to further increase teledensity, enhance customer experience and empower communities,” he said.
Hemant Joshi, Partner, Deloitte Haskins & Sells said since the NTP-12 is going to make roadmap for availability of spectrum every five years, it would result in appropriate allocation of spectrum and also help operators design network and technology adoption keeping in view the availability of spectrum.
“NTP also envisages licence and technology neutral spectrum allocation, which is step in right direction considering evolving efficient technologies. In terms of abolishment of roaming charges, this would be negative in short term for operators as they would lose roaming revenue. However, in the long run as usage would increase with no roaming charges it might offset the revenue loss caused to the operators’ said Joshi. As for the single all-India licence, he said, same is likely to be beneficial for pan-India operators as they would be required to maintain one set of book and also number of compliances would reduce significantly.
In a move that will clip the Telecom Regulatory Authority of India’s (Trai) wings to some extent, the government clarified it would not have policy-making powers and would operate solely as a regulator.
G Krishna Kumar, a wireless professional based in Bangalore, warns the NTP-12 should not go the 2004 broadband policy way.
“The 2004 broadband policy envisioned 20 million broadband subscribers by 2010, but in reality less than half was achieved. We need the right infrastructure and a solid ecosystem for the goals of NTP to be achieved,” he said.
He expected the penetration of broadband to boost economic growth. “It is established that broadband contributes to increase in GDP. Every 10% increase in broadband contributes to 1.4% increase in GDP.
