The Cabinet clearance for the National Telecom Policy 2012 (NTP 2012) comes at a time when the sector is trying to grapple with controversial issues like spectrum allocation and security concerns regarding telecom equipment.
While the National Telecom Policy of 1994 focused on improving India’s teledensity and attracting foreign investments into the sector, the new policy wants to consolidate on what we have achieved so far and also ensure a better deal for the subscribers.
The new policy wants to simplify the licensing regime, which was at the centre of the 2G controversy. The Cabinet has also approved the introduction of a unified licence structure and has authorised the department of telecommunications (DOT) to finalise it. It has also delinked spectrum and licensing and, therefore, licence holders will be able to offer a much bigger basket of services.
While the licence fee methodology and the scale are still to be decided and is under consideration of the DOT and the Telecom Regulatory Authority of India, the effort to accept online submission and the processing of these applications will bring in transparency and a level-playing field.
The issue is how soon can these be implemented and how many of the current players and their investments would be finally factored into this arrangement.
The announcement of a One Nation plan, which will allow mobile number portability across circles and also free roaming, is good news. But there are two nagging questions: how hassle free would the process be and whether it will impact operator efficiency.
While the teledensity in urban areas has vastly improved, the government now has to focus on increasing rural teledensity and unless a target date is set in the NTP 2012 to take rural teledensity from the current level of around 39 to 70 by 2017, we will not be able to reach 100% teledensity by 2020.
The effort now should be to sustain the number of users, improve the quality of services and extend broadband to rural areas at a much faster pace.
At the same time, we need to pay more attention to the telecom equipment market. While the security of such equipment and related infrastructure are a concern, there should be emphasis on nurturing and sustaining a manufacturing sector that supports cellular handsets and exchanges.
According to the Indian Cellular Association, the demand for handsets in 2011 was more than 180 million (worth Rs. 38,000 crore. The demand is projected to touch 250 million worth Rs. 54,000 crore in 2014). This is a big opportunity for the Indian telecom manufacturing firms to compete with markets like China and Taiwan. Funding support for R&D and Indian IPR in the sector should be a part of the implementation of the NTP 2012.
The NTP 2012 has also covered converged digital space that will be manifest in smaller and handheld devices with cloud computing enabled networks and IPV6 connectivity.
Subimal Bhattacharjee heads a multinational defence corporation and writes on technology
The views expressed by the author are personal