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Cabinet OK’s National Telecom Policy

New telecom policy proposes to abolish roaming charges on mobile phones.

Written by Agencies | New Delhi |
May 31, 2012 2:26:20 pm

Aiming to boost transparency and revive growth in the scandal-hit sector,the government today approved a new telecom policy that aims to ultimately abolish roaming charges,besides relaxing Internet telephony rules.

The National Telecom Policy 2012,which replaces more than a decade-old rules,was approved by the Cabinet headed by Prime Minister Manmohan Singh,Telecom Minister Kapil Sibal told reporters after the Cabinet meeting.

“The target is one nation full mobile number portability and working towards one nation free roaming,” Telecom Minister Kapil Sibal said.

Under the new policy,the government plans to remove roaming fees,allowing users to retain their numbers even if they move from one circle or zone to another.

However,consumers will have to wait for some time for this as the Department of Telecom will first work out modalities of the new scheme before it is brought into force.

Consulting firm Deloitte said NTP will benefit consumers,though it may impact the operators negatively in the short term.

“Number portability is going to be boon for consumers as they would be able to retain the number even though they migrate from one telecom circle to other… abolishing roaming charges would be negative in short term for operators as they would lose roaming revenue,” Deloitte Haskins & Sells Partner Hemant Joshi said.

However,in the long run,as usage would increase with no roaming charges might offset the revenue loss caused to the operators,he added.

The NTP will also separate telecom licences and spectrum,against the current practice of bundling them,and will charge a market-derived price for the airwaves. Also,rules for Internet telephony would be relaxed under the new policy as it envisages increasing penetration of telecom services in rural area from current level of around 39 to 70 per cent by 2017 and 100 per cent by the year 2020.

Under the new policy,broadband speed has been increased to minimum of 2 megabit per second (mbps). This change will come into force with immediate effect.

The NTP also aims to ease mergers and acquisition rules in the sector and seeks to refarm,or switch,spectrum bands “from time to time” to make way for new technologies.

The Cabinet has also cleared the point that pertains to encouraging domestic manufacturing of telecom equipment.

“Making India a global hub for manufacturing. Till the time we will not set up industry here…India will not be able to become become global. It is very important because along with this prices of device will also come down,” he said.

The major details of the manufacturing telecom equipments are part of National Policy of Electronics,which Sibal said is expected to be approved within a month.

“Electronics manufacturing policy is hopefully going to be decided this month.. it will go to Cabinet soon,” he said.

The Cabinet has approved NTP 2012 with five changes related to revenue generation objective,Spectrum Act and TRAI Act. The government has deleted Spectrum Act,which was proposed in the policy.

“Spectrum Act has been deleted as a policy matter we don’t intend to have a spectrum act any more,” Sibal said.

On giving more powers to Trai,the Cabinet has added that policy making function would remain with government and not the sectoral regulator.

“We just want to add that policy making function would,however,continue to remain with government,means TRAI will not make policy,” Sibal said.

NTP 2012 to be a boon for consumers: Experts

The New Telecom Policy,which was approved by the Cabinet today,will be a boon for consumers as they would be able to retain the number even when they migrate from one telecom circle to other,says consulting firm Deloitte.

The NTP 2012,which replaces more than a decade-old rules aims to ultimately abolish roaming charges,besides bringing in transparency and growth in the Indian telecom sector.

In the short-term,however,the NTP may impact telecom operators negatively as they would lose out on the roaming revenue. “However,in the long run as usage would increase with no roaming charges might offset the revenue loss caused to the operators,” Deloitte Haskins & Sells Partner Hemant Joshi said.

He said the government’s plan to make roadmap for availability of spectrum every 5 years would result in appropriate allocation of spectrum.

It would also help operators design their network/technology adoption keeping in view the availability of spectrum,he added.

“NTP also envisages license and technology neutral spectrum allocation,which is step in right direction considering evolving efficient technologies,” Joshi said.

“The NTP 2012 projects a bold vision for telecom sector with emphasis on spectrum management,broadband on demand,domestic manufacturing,rural coverage and infrastructure status,which would spur growth of the telecom sector and in turn Indian economy as telecom can play role of catalyst in the GDP growth,” Joshi said.

He added that the approval has come at the right time as country’s GDP growth is falling. The country’s GDP growth has slowed down to 5.3 per cent in January-March quarter,2011-12,compared to 9.2 per cent in the same period in 2010-11.

As per world bank estimate,a 10 per cent increase in telecom penetration results in 0.81 per cent growth in GDP in a developing country.

The new policy broadband speed also mandates increasing broadband speed to minimum of 2 megabit per second (Mbps),with the change coming into force immediately.

Nokia Siemens Networks (NSN) Region Head India Sandeep Girotra also welcomed the NTP,saying the focus on providing broadband for all,local manufacturing and security were steps in the right direction.

However,Rajeev Chandrasekhar,Member of Parliament,expressed disappointment at the National Telecom Policy.

“The Cabinet approval of NTP 2012 and the unified licensing regime is welcome only because it ends the one-year delay that this policy has faced. Regrettably,neither the policy nor the unified licensing regime will resolve any of the crises that currently stalk the telecom sector,” he said.

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