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Get Ready To Pay More

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Be prepared to pay more if Union Communications Minister Kapil Sibal manages to get the Draft National Telecom Policy 2011 passed by the Cabinet.  Further, many new services in the draft aimed to benefit customers are dependent on the operator and the market — one nation free roaming, full mobile number portability and rural connectivity.

The national licence proposal aims to bring in consolidation. However, the draft policy is silent on the cost of the bail-out package or migration scheme it proposes. Broadband and rural connectivity do not have a fresh approach, but only offers fresh targets and plans.

The draft NTP 2011 does not spell out an exit policy and merger and acquisition norms.  A separate Spectrum Act, setting up of a Telecom Financing Corporation, IPV 6 compliance, code of practice for sales and marketing, standard operating procedures for operators in case of emergencies, recognition of telecom as infrastructure sector and strengthening the Telecom Regulatory Authority of India (Trai), are a repeat of existing and earlier telecom policies and lacks a new vision.

Officials in Telecom Commission expect large scale changes in the ‘final draft' that will be placed before the cabinet.  "We only have the ingredients that have been decided, not what and how the cuisine will be prepared," says a senior member of Telecom Commission. The Telecom Commission is the core team that prepares the NTP guidelines and takes other decision regarding the telecom sector. The guidelines are prepared on the lines of policy framework that the government of the day wants to give and is piloted by the Telecom Minister.  

The draft aims to bring in consolidation in the sector, rather than taking care of the customer's issue, as it was in earlier policies. 

Revenue Generation Is Motive No. 1
Union Minister for Communications Kapil Sibal unveiling the draft NTP 2011 said, "In achieving the goal of NTP 2011, revenue generation will play a secondary role." But the fine print of the draft NTP 2011 only indicates revenue generation as the prime motif.

"Operators will get a free run on tariff," says top Telecom Commission member. Private telecom operators are already preparing the ground to hike the tariff. Already, operators are wailing, following the higher spectrum fee that they had to shell out in 3G and BWA.  While the government will get higher revenue, the spectrum operators will try to justify higher tariff for customers. Add to that the higher spectrum, the taxes that account for more than 33 per cent of the total tariff that a consumer pays.

Delinking Spectrum From Licence
The draft NTP 2011 proposes to delink spectrum form licence. It is a welcome departure from the earlier system, where spectrum was allocated free. Operators deliberately used the spectrum inefficiently to show that it was starved of spectrum (popularly termed as hoarding in telecom sector) to service the growing subscriber base, resulting in a bad quality of service.

"We will have to bring in legal backing to make operators pay up, for failing to maintain QoS parameters," says a Telecom commission member. Sources in Department of Telecommunications, said that the Minister was not inclined to adding such a direction in the draft stage.

Amongst the other draft proposals Minister spoke about NTP providing impetus to domestic manufacturing. But the draft is silent on qualification of a domestic manufacturer. It is a long standing demand of the local manufacturers, since even multinational companies have been able to take advantage of the loopholes and taken benefits of the government benefits. 

As a result, the policy will have to bring clarity in the final policy, if specific measures to encourage of development of "Indian Products", where the IPR is in India, and which create the maximum value addition are to become a reality.