New ring to telecom PDF Print E-mail
Wednesday, 27 July 2011 00:00
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Policymaking in India’s telecom sector seems to respond only to crises, so it’s a relief to see telecom minister Kapil Sibal coming out with a forward-looking policy even though there’s no crisis or scam in the offing. In 1999, when the telecom industry was on the verge of going bankrupt, the government came out with a revenue-share policy that revived the industry’s fortunes; in 2003, when the TDSAT ruled against the abuse of the limited mobility licences, the government came out with the Universal Access Service Licence that allowed those with fixed land licences to offer mobile services and vice versa. The natural progression of this, one Universal Service Licence (USL), which would allow telcos to offer any service never got implemented, even though it was on the then telecom minister’s agenda. It is this that Sibal now wants to activate. Once this is allowed, Reliance Industries, for instance, which has 20 MHz of spectrum to offer broadband wireless access (BWA) or Internet services will now be able to offer mobile telephony as well. Nor is Reliance the only one, others who have BWA spectrum include BSNL/MTNL and firms like Bharti and Aircel have a few circles each. The point is not about making policy to favour one firm over another, it is about making the best use of resources. If wireless devices for BWA can also be used for making voice calls, it makes economic sense to allow this.

But moving to New Telecom Policy 2011 requires addressing various legacy issues. Since BWA licences have been won in auctions, there can be no case for charging them an entry fee; similarly, if an ISP today wants to start offering mobile telephony under the USL, that firm will have to buy spectrum in an auction, so there’s no issue here. The obvious points that need ironing out are what the single licence/spectrum fee will be—you can’t have one for ISPs and another for mobile telephone firms. Similarly, the current restrictions on holding spectrum clearly have to go—the current cap in case two mobile phone firms merge is 15 Mhz, and the Trai wants to reduce this to 14 Mhz. Once a service-agnostic licence is in place, and all future spectrum is bought in the market, all such caps become irrelevant. Here’s to a forward-looking policy.


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