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‘Policy Is Not A Hurdle’
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Is the Indian telecom sector still attractive? Has the alleged corruption dented its prospects?
The Indian telecom sector remains attractive. What has happened in the sector in the last 15 years is impressive by any standards. While we need to deal with the past, we cannot afford to lose our focus on the future. In terms of progress, what lies ahead is more exciting than what has already been accomplished. We are reaching a near-saturation stage for mobile connections in urban areas. But the challenge is to achieve 100 per cent mobile penetration in rural areas too. That is the immediate goal and opportunity.
The bigger challenge is to move into the broadband era rapidly, and to ensure that it becomes as ubiquitous as mobile coverage in the shortest possible time.
Would you term that a new challenge?
Broadband access is a new challenge as well as a continuation of the old challenge. If you look at the service providers, extension of broadband is linked to availability of 3G and broadband wireless access services. It also necessitates extending the reach of optical fibre infrastructure to the panchayats and villages, which is required for the backhaul.
The demand for fixed-line phones is falling. Can broadband stem that fall?
Definitely, we can expect a positive impact on the demand for fixed lines as broadband becomes ubiquitous, and even more so once the range of services increases. Secondly, we are examining the whole range of issues regarding convergence at carriage level. That will bring its own set of imperatives. These relate to content, entertainment and gaming, education, health and financial services, e-governance and a whole range of such services both in the public and private sector. These are the chief drivers of broadband. As these services proliferate and expand, they will become the chief drivers of demand for broadband, and in turn, for fixed line. Further, this requirement is not only for provision of services. Increasingly, there will be a convergence of devices and utility. Consumer devices being networked will also lead to greater demand for broadband and fixed lines.
So that would need a change in policy…
Obviously, some finetuning of policy and regulations is required. But much of the existing policy framework has visualised these changes. So, we will need to see what kind of finetuning is needed to ensure that the regulatory and policy framework is not a hurdle. Take financial services on the mobile. This entailed some adjustments in the regulatory framework, because it covers both telecom and financial sectors. There are two separate regulators. So it needed study, recommendations and decisions to be taken on such issues.
But what about telecommunications and broadcasting, where there is a single regulator?
Each issue would have to be dealt with as a separate case and the regulator who would deal with that issue identified. If we take broadcasting, the spectrum part is dealt with by the Wireless Planning Coordination wing of DoT. And in matters of regulation, Telecom Regulatory Authority of India (Trai) has an overarching role. We do have some existing advantages, in terms of these arrangements being within the ambit of a single department.
What role will regulators play when the convergence of technologies happens?
The goal is to ensure that there is a convergence regime, which helps the country enjoy the full range of benefits that technological developments allow. Regulation should not become a barrier to realising that benefit. For that, whatever regulatory changes are needed will have to be initiated and necessary legislation brought in. But since there are existing regulators, it is necessary to examine if these functions could be performed by any of them, before bringing in a new regulator.
The telecom sector needs some confidence. Will NTP 2011 be able to give that?
There are some issues here. We need to ensure that connectivity reaches the rural areas. Not just any type of connectivity, but one that allows various services to ride on it, and ensure that there are no barriers to this goal. Barriers could be regulatory or they could relate to viability. When operators go to rural areas, viability can be a major issue.There are challenges in having a uniform framework, which ensures viability in urban and rural areas simultaneously, while ensuring that the government gets its fair share of revenue. These multiple objectives need to be balanced. There is also a view that some aspects of the existing policy may have outlived their utility. So, some changes in such aspects would be required.
(This story was published in Businessworld Issue Dated 01-08-2011)