Unit-24 Telecom Policy a Case Study of India

7/31/2019 Unit-24 Telecom Policy a Case Study of India

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UNIT ACASE STUDY

Structure

24.0 Learning Outcome

24.1 Introduction

24.2 Telecom Sector: Broad Policy Framework and Status

24.3 Telecom Policy: Changes and their Impact

24.3.1 Telecom Sector: Restructuring

Telecom Policy: Increasing Role of Private Sector

24.3.3 Telecom Policy: Investment in Telecom Sector

Telecom Policy: Technology Transfer and Development

Telecorn Policy: Service Provision

24.4 Telecom Policy: Findings and Suggestions

24.4.1 Telecom Sector: Need Assessment and Model Building

24.4.2 Issues in Financing: Increasing Investments

24.4.3 Technology Transfer and Development: Issues

Service Provision: Delivery Regulation

24.5 Conclusion

24.6 'Key Concepts

24.7 References and Further Reading

24.8 Activities

,

24.0 OUTCOME

After studying this Unit, you should be able to:

Understand the reasons for great strides in growth and expansion of telecom sector in India;

Describe the telecom policies in India;

the telecom policies and impact on the telecom sector; and

Recommend suitable measures to boost the growth and development of the telecom sector.

24.1 INTRODUCTION

Telecommunication is vital for providing connectivity between producers and markets, clients andservice providers, exporters and importers, functionaries and citizens, publicandprivate

organisations. The telecom services have also been recognised as an important tool for

economic development.Witheconomic liberalisation and the likelihood large investments flowinginto India, new demands of business have spurred telecorn-based innovations

for competing in global markets.

Telecommunications is one ofthe fastest growing sectors in India. With 125 million telephone .

networks, mobile phones; it is one of thelargest networks in theworld. However, telephonepenetration rate continues to be low at 11.32 phones per hundred Major initiatives

I


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Public Policy andAnalysis

to improve the system and telecom policy the opening up of international long

distancetariff, 'internet telephony, setting up a mechanism Social Obligations,

permittinga operator in the cellular mobile segment, commissioning of National Internet

Backbone, and providing Village Public Telephone Under the New Telecom

Policy (NTP) private and public sector companies, operatingin acompetitive market, provide the

services.

In this Unit we willgive an overview of the various organisations involved in the Indian telecomsector,andassess the policy initiatives of the government. Attempt will be made discuss telecom

policiesandconsequences of policy changes on policy impleinentation, response of organisations,

and the level of success achieved. In view ofthe new policy, we will discuss key policyissues that need to be resolved to fully achieve the objectives set out.

24.2 SECTOR:BROAD POLICY

FRAMEWORK ANDSTATUS'

TheIndian Telegraph Act 1885,and the Wireless Telegraph Act 1933predominantly governed

the sector. These Acts had been modified several times. Earlier the telecom sector was a

state monopoly. The Department of Telecommunications under the Ministry of

Communications, administered the telecom services.Inthis regard, planning, engineering,maintenance, management, and operations managed by the This

ment also lay down andmonitored adherence to technical standards, managed frequency usage.

At present, is responsiblefor policy formulation, review, monitoring, international

cooperation, researchanddevelopment, and grant of licenses to operators for providing basic

value'-added services as per'approved policyofthe government. The Department also allocates

frequency and manages radio communications in close coordination with the international bodies.

Apart from this, it is also responsible for enforcing wireless regulatory measures and monitoring the

of all users in The following units cooperate, co-ordinate, and contribute

in providing affordable and effective services to the customers.

DOT-Units

Public Sector Units

o Bharat Sanchar Limited(BSNL)

Indian Telephone Limited

Telephone Limited(MTNL)

Consultants

Other Units

Wireless Planning&Coordination Wing (WPC) .

Telecom Engineering Center (TEC)

ControllerofCommunication Accounts (CCA)

Center for Development of (C-Dot)

Earlier, telecom sector wascharacterisedbyoutdated equipment, under-investment,andunfocused

growth. Therefore, the government made effortstorevise thepolicy, and structure of

the telecom sector.The imperatives for were the overall trend of economic

and the technologicaladvances.Inthis regard, theDOT has been developmental

fo r the accelerated growthof services in India.


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314 Public PolicyandAnalysis

In 1991, the telecom equipment manufacturing was delicensed, and in 1992 value-added services

open to the private sector. It followed radio paging, cellular mobile, and other value-addedservices, which were opened gradually to the private sector. In 1994, the National Telecom Policy

(NTP) was announced. The major thrust was on universal service and qualitative improvement in

services'and also, opening of private sector participation in basic telephone services.

Since 1995,there had been pressure frominternational organisations,such as, the WTO, to reviewthe of and monopoly in long distancecommunication. to

over international telecom and broadcast transmission.

In the Plan the government substantially increased the outlay for

telecom sector.It included an investment of about $6,000million, increase of telephonelines from 5.2 million to 10.7 million, and extending the area of operations in terms ofkilometres from 59,000 to The government included Telecom as apart of technologymission, a set of dedicated, welfare-oriented, being implemeated atthe national level. Even then the government could not provide commensuratelevel of benefits due

to the diversity in types of switching technology transmission media. Moreover, meagre

government investments on basic infrastructurefor rural areas and on provision of integrated digital

services network did not result in noteworthy improvements in the telecom sector.

In per cent of the switching, and45per cent of the transmission media had been digitised.investments focused on further digitisation of the telecom network, satellite

optics, and wireless in the local loop, The satellite programme had been fairly successful, with

the development and launch of indigenous multi-purpose satellite systems. The Ministry of

Communications, and the and Broadcasting used the satellites.

In 1997, legislation was enacted to set upa regulatory body, the Telecom Regulatory Authority ofIndia .

iii) ThirdPhase 1999 tilldate

Th e most significant landmark in reforms came the NewTelecom Policy,1999

(NTP-99). The government recognisedandaccepted the importance of telecommunications as an

impostant servicefor common man and an important variable in economic growth. Keeping these

considerations in view, thefollowing objectives were included in the Tenth Five-Year Plan:

Provide affordable and effective communication facilities to all citizens.

Make provision of universal service to all uncovered areas, villages.

Build a modern and efficient telecommunication infrastructure to meet the convergence of

telecom, and the media.

Transform the sector to a greater competitive environment providingequal opportunities and level playing field for all the players.

Strengthen R&D efforts.

Achieve efficiencyand transparency in spectrum management.

Protect the defence and security interests of the country.

Enable Indian companies to become truly global players.

The specific targetsofthe NTP-99areas follows:

Availability of on demand by the year2002 and sustain it thereafter so as to achieve

a tele-density of7 by the year 2005 and 15by 2010.

Encourage the development of telecom invillages, making it more affordable by suitable tariff

structure and making mandatory for all free service providers.


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Policy: A CaseStudy 315

Increase rural tele-density from the curren t level of0.4per cent to 4 per cent by 2010 andprovide reliable transmission media in all areas.

Achieve telecom coverage of all villages and provide reliable media to all exchanges by

2002.

Provide Internet access to all District in the country,

e Provide by 2002high-speeddata and using technologiesincluding ISDN,

to all towns with greater than two lakh.

the potential ofubiquitous broadband service in growthofGDP, and enhancement of

of life (the government have finalised a policy) to accelerate the growth of broadband

service. It enhances of through societal applications including tele-education, tele-medicine,

e-governance, entertainment as well as generation way high-speed access to

and web-based communication. Thegovernment's Broadband policy is based on

recognition of need to provide effectiveand affordable broadband facility to the customers.

BroadbandPolicy2004: Policy Framework

The Broadband policy creation of infrastructure through various access

technologies that can contribute to growth and can mutually co-exist. Spread of is

also necessary for healthy competition. Various access technologies include Fibre

Digital Subscriber Lines (DSL) Copper loop, Cable Satellite

Media, Wireless, and Future Technologies,new options be used for provisioning

of broadband services in the changing scenario. Most is the of Internet use

due to broadband.

Quality ofService

' As perTRAIAct, 1997, theTRAI has to prescribe parameters. Therefore, keeping in view

the of on investment and rollout decisions of operators,TRAI will prescribe theparameters.

of clearance ,

A transparent isoutlined separately for time-bound allocation, siting clearance

and wireless licensingby the cumbersome procedures, and

predetermined standards.

Role ofotherAgencies

The policy highlights that the broadband services will accelerate decentralised governance at

panchayat level. In th is regard, to carry the advantage of these services to users, role otherlike electricity authority, DepartmentofITof various state governments, DepartmentsofLocal Self-Government, Panchayats, Departmentof Welfare

ofEducation is very impo tant.

Fiscal Issues

The a very high priority to indigenous of broadband related equipments.To provide atanaffordableprice, works closely with the concerned Ministriesand Manufacturers' Associations.

Themajor policy initiatives in the important areas, such as,reduction of charges, waiver of

rollout obligations, accession of subscribes, as on Jan 2006,aredescribed

in the following table.


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316 Public Policy andAnalysis

Table 24.1 Telecom Policy: Major Initiatives

1,

2.

3.

4.

5.

6 .

7 .

8.

9.

10.

11.

12.

13.

Source:

Area

Reduction in calls charges.

Reduction in Annual licensefee January 2006.

Reducation in entry fee for

NLD licenses.

Reduction in entry fee

Permission to carry

circle traffic.

Waivingof mandatory

rollout Obligations forNLD licenses liberalised.

Mandatory rollout obligations

for ILD. service licenses.

and paid- upcapitalofthe

Accession ofsubscribers

Non-issuance of andlicenses.

License fee for InternetService Provider (ISP).

Annual license fee-VSAT

Foreign Direct Investment

(FDI) in Telecom Sectorliberalised.

Ministry of Finance, Economic

Policy Initiatives

BSNL announced 33% reduction in international callcharges across the board.

Annual license fee for NLD as well as licensesreduced to 6% of Adjusted Gross Revenue.

Entry fee reduced to Rs. 2.5 crore Rs. 100 croreprospectively.

Entry fee reduced to Rs. 2.5crore from Rs. 25 crore.

service provider shall be permitted to carry intra

circle traffic with mutual agreement of originating serviceprovider. Here, agreement with terminating service

provider is not required.

Mandatory roll out obligations for future licenses

as well as existing NLD licenses waived off,

o No more mandatory roll out obligations except for having

at least one switch in India. For existing servicelicense, roll out obligations stand waived from the date

ofissue of orders.

o For NLDas well as service license charge is reducedRs. 2.5 crore only and while counting the networth, the

of promoters shall not be counted.

NLD service providers can access the subscribersdirectly for provision of leased circuits closed user

groups, and can provide last mile connectivity.

o service providers can access the directly

only for provision ofleased circuits closed user groups.

. No more and licenses to be issued with

immediate effect as these licenses are allowed tomigrateto service license.

ISPwith internet telephony (restricted) to be chargedlicence fee at 6% ofAGR January 1, 2006.

Annual license fee in respect ofVSAT commercial to, be charged at 6% of AGR January 1, 2006.

ceilings raised from 49% to74%.

100% is permitted in the area of telecom equipmentmanufacturiqg and provision ofITenabled services.

Division, GovernmentofIndia.


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A CaseStudy of 317

AND

this section, we will concentrate on growth of sector and the issues in telecom

policy, such as, role ofthe private sector, share of mobile phones, rural telephony, broadbandconnectivity,spectrum management, foreign investment, research &development, validationand standardisation, tariff rebalancing measures,and international cooperation.

The drivers of telecom growth, as presented in the following table have undergone a

significant changein terms of mobile versus fixed phones, as wellas

public versus private serviceproviders. It is evident from the data the spares of mobile phones and the private sectorincreased from about 6.28 (2001-02)to about61.60million that is,about ten-fold increase. years, with lower capital expenses of technology,ithas

the technology of low priced telephony.

Table24.2:Growthof Telephones

Year Fixed(inMillion) Percent Mobile(including

PSUs PSUs

6.54

ninemonthsof2005-2006.

Source:Ministry of finance, EconomicDivision, Government of

Table24.2presents data about the significant growth in thenumber of telephones from April2001December is evident that the PSUs, that is, and have been losing their

share in telephony. The PSUs have shown adecreasing trend, in this sphere as isclear from the The share of PSUs in was98.65per cent, which decreased to85.31per cent However, the number of fixed phones in the private sector increased

from 7.01(December which is almosta fourteen times increase. Datapresented above also shows that the sector operators have improved their share in mobile

telephony from 3.98 per cent to 2 1.11 percent of the market. While the public sector was slow totake offin mobile telephony, the operators had anaggressive start andkeptuptheir vibrantmarketing strategies, four-fifth ofthismarketby the end of 2005.

Economic Survey of Indiahasapplauded telecom companies (publicandprivate) for increasingthe teledensity from 2.32 per cent in 1999 to 11.32 per cent by 2005. In addition, significantgrowth has been identified in broadband service, that is, from about subscribers in2004to

about7.5 subscribers by the of2005 Business, February 28,2006).

FirstNineMonthsof 2005-06

Under with the provision of affordable and effective as its vision goal,the telecom sector has grown a lot in years.As mentioned above, with rapid growth,density has surpassed the targets set. The data reflects that the total number of telephones


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31 8 Public Policy and

(basic rose from 44.96 million during 2001-02 to more than125.79 millionbyDecember2005. However,21.83 million telephones were added during 2004-05, and another 27.47 millionduring the first nine months of 2005-06. With the introduction of mobile connection with free

incoming lifetime packages during December 2005-February there hasbeenanunprecedentedacceleration of this trend.

The government had initiated several policy changes to provide acceleratedgrowth in infrastructureand services; improve service conditions; and provide autonomy, flexibility, and competitiveness

within the telecom sector: The policy changes were initiated mainly in restructuring the telecomsector, increasing investments, service provision, and technology development and transfer.In thefollowing sub-section, we will review the policy changes and assess their impact on the telecom

\sector.

24.3.1 Telecom Sector: Restructuring

The focus of policy makers on restructuring had been on the organisational and not so much

on identifying the mechanisms for acquisition of new core capabilities, appropriate incentives, andappropriate working conditions in which change could take place. However, major

as, management of unions and retraining of the staff to itself to competitivewere neglected.

The setting up ofthe in 1997separated the regulatory function from However,making and operations continued to be with the latter. The government's approach toreform had been ad-hoc, which was driven primarily by increasing pressures from the private

operators, but not as apro-active agenda in an overall plan reform. The government had notaddressed adequately the basic necessary for reform,as there was no pre-plannedsequence of structural changes, which are the basic determinants of effective reform. Therefore,

the various stakeholders,such as, the government, investors and subscribers could expect onlymarginal benefits, and that too at a slow pace from the reform process.

24.3.2 Telecom Policy: Increasing Role of Private Sector

The sector has to play asignificant role in the growth of the telecom sector. Key

driver for change in this sector was the NTP which paved the way for private sectorparticipation in telecom services. In the process of liberalisation, inter-circle remained

under the VSNLmaintained anexclusive license for international services until2004.Advancedservices, such as, cellular, paging, e-mail, fax, data transmission over telephone,

and leased circuits were increasingly being made availableby operators.of Electronic Data Interchange standards had not made the desired progress due to the problems

in long distance communication;and lack of coordination and clarity in policies in the departments,which were involved in implementation. After the NTP1999, situation of the private sector haschanged alot. The share of private sector in the total telephone connections has increased. It is to

be noted that out of the 163.52 additional phone connections provided during 2004-05,

connections (about77per cent) were provided by the private sector. (Vide table24.2).

24.3.3 Telecom Policy: Investment in Sector

1) Increasing Investment

The entire budgetary provision ofRs.18 allocated for the year 2002-03 (Rs. 300

crore), 2003-04 (Rs. 200 crore), 2004-05 1314.58 crore), and 2005-06 (Rs. 1766.85


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Policy: A Case Study ofIndia 319

crore) was fully (Hindustan Times, May 2,2006).Though the government investment in

this sector had steadily increased, telecom's share of investment in the economy remained or

less steady at an average of2.8 per cent until 1985. Although the budgeted share of investmentfor 1992-97 showed increase to5.8per cent, it was far less than what other developingcountries were investing in the at that time.However, in the Tenth Five-YearPlan the

shareof telecom sector was increased to6.5 per cent. Data on outlays for the sectorthe first to the tenth plan is presented in the following table.

Table 24.3 : Share of Telecom Sector

Five-YearPlan

Total OutlaysActual (Rs. in

crore)

1,960

Period

FirstPlan

Second Plan

Third

Annual Plan

Fourth Plan

Fifth Plan

Annual Plan

Sixth Plan

Seventh Plan

Annual Plan

Annual Plan

EighthPlan

Plan*

Tenth Plan

-

-

Communication

1951-56

1

1961-66

1966-69

1974-78

1978-80

1980-85

1985-90

1990-91

1991-92

1992-97

1997-2002

2002-2007

Percent

TotalOutlay

2.4

1.4

Outlay of Communications for Ninth Plan also includes Rs. 300 crore for Information

Technology.

Source: & IT,Government ofIndia.

There were a number ofrestrictions for raising for the telecom sector until 1984.

Subsequently, government ofthese constraintsand andVSNL

to raise funds byissuing low interest tax-free bonds.VSNL the public sector undertakingto equity,in 1997,in the international The had also

roleofincreased investments, which had been reflectedin itsbiddingguidelines both for basicwhere mandated foreign financial

ii) Foreign DirectInvestment(FDI)

Oneofthe significant sources of the substantial financial investment required for growthofteledensity has been In the case of during1991 (August) to 2004 (September)930

proposals of of Rs. crore were approved, which is second only to Power

Refinery sector. However, after2001 inflow into telecom sector improvedThe Government is telecom guidelines.

view ofthe Government's commitment to the ceiling in telecom sector was

enhanced,in November2005, 49per cent to74per cent in areaslike basic, cellular,


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Public Policy andAnalysis

unified access national long distance, Very Small Terminal (VSAT)I Mobile Radio Trunk Services (PMRTS), Global Mobile Personal Services

(GMPCS)and other value-added services. Here,74 per cent FDIceiling includes direct andindirect foreign holding in the concerned.

24.3.4 Telecom Policy: Technology and Development

had attempted to follow a policy of self-reliance in the manufacture of telecom products

through indigenisation. However, in the wake of liberalisation, the attempted to introduce

some advanced technology both by and by seeking foreign collaborators. Import oftechnology was also linked the requirement of phased indigenisation. India's indigenisation

in the switching segment carried outbyC-DOTwas successful in the introduction of

exchanges.

i) TelecomEquipment andSystems: Research and Development, Validation and

TheCentre for Development of Telematics (C-DOT) has been engaged in indigenous research

and development of telecom systems. Centre has developed a wide range of

switching and transmissionpsoducts for applications.TheC-DOThasalso developedmain, mediumand automatic exchanges, an integrated Time Division Multiple Access-Point

Multi-Point(TDMA-PMP) serving 256 subscribers sparsely distributed within a radius of20

Recourse to upgraded technology enabled the manufacturers to increase production capacity to

seven lines per annum. The C-

DOTextends pro-active support for the operation andmaintenance ofits products. It's small capacity RAX C-DOT SBM RAX has also been

of countries in Europe, Asia and Africa.It is also to safeguard the

telecom service providers in technology by upgrading the existing systems

In September2005,C-DOT formed with to C-DOTAlcatel Research

Center, which is working on broadband wireless solutions. is developing technology

suitable for areas in India (Gairola, April2006).

Internet Exchange has been set upby the to ensure that Internet traffic

originating and destined for India, is routed within India only. Telecom Engineering

is devoted to the product validations and for the user agencies, providestechnical support to Telecorn Commission and the field units. The Indian Telephone Industries

Limited manufactures telecom equipment, and offers customised telecorn solutions and

support lo customers.

ii) SpectrumManagement

Radio frequency spectrum has become an essential ingredient in with

its emphasis mobility; theGovernment of Indiahas adopted atechnology-neutral policy in

the telecom sector. Serious being made to introduce emerging radio

without unduly constraining the other existing operations. The policies on allocation

of spectrum are critical to the future of the Although the allotment of spectmm is

being managed in an objective and transparent manner, the service providers and other wireless

users along with the need to playamore and disciplined role in mutualunderstanding and cooperation. There been an on-going process of addressing bottlenecks in

availability. Automated system in India


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Policy: A Study India 321

2005. Efforts are being to get the spectrum required for public telecom services by its

from other existing users. For management, and augmenting the wireless monitoring

systems a World Bank Project is being with an outlay of Rs. 200 crore.

24.3.5 Policy: Service Provision

In the earlier phase, basic service provision in most areas was poor. Until 1998, private basic

service was available in Pradesh only. Service provision has been receiving considerable

attention in the as well.A network of 76,000 Tele-Info Centres (PTICs) and5,000High Speed PTICs is being as part of service provision, especially in the areas.

Further,1.84Lakh Access Radio Relay (MARR)-based VPIs will be replaced. In this

per of such VPIs have already been replaced and the remainder will be replaced

during 2006.

i ) Data Services

First public data communication network, was started in 1985 in IndiabyCMCLtd.,which is a public sector computer I-Iowever, it could not the desired objectives

due to poor service quality and lack of revenues for expansion. Since 1992, the owned and

operated data communication which initially linked eight metropolitan cities in

India through 9.6 kbps and64kbps data links. However, there were in service provision

and often the quality of service was poor, resulting in poor growth ofnetwork.

National Centre (NIC), a government agency, had se t up a nation-wide network,

NICNET, using for various government and semi-government organisations. has alsoprovided design and implementation support. In cases, the was used

for generating fixed reports. There was little flexibility in querying or report generation.

Since mid nineties. An educational network,ERNET,set up in the mid-ninetiesbyDepartment of

Electronics with funding from the linkedupseveral universities, research and educational

institutes and had been in providing e-mail, internet connectivity and other networkservices. However, its services are not generally available to cominercial organisations. Although

the allowed privateVSATprovision, and tariffs were regulated by it, The did not allow

leased private networks or VSAT-based networks to be connected to the public switched network.

ii) Increasingroleof MobileService

In May 1991 , the announced its intention to award licenses to private operators for

providing cellular phones in the four metro cities of New Delhi, Calcutta, Bombay, and

and paging services in 27cities across India. Cellular services were viewedasa lucrative segment

by private entrepreneurs, and as such there was an response for bids. Despite the

initial hurdles, by 1997, cellular services were well established in metropolitan cities andseveral other cities.

ii) RuralTelephony

The government encouraged new emerging technologies including local loop wireless, cellular

telephony and based communication systems that could help to develop in acost effective manner. As as villages were connected by December2005,usingaVillage Public Telephone(VPT).The government plans to provide connectivity to 14,183 remote

and far-flung villages using digital satellite phone terminals. Despite increaseofvillages connectedby phone, rural connectivity is also an concern. It is expected that the pace'of work in

sphere would considerably provision of adequate funds and broadband

networking the and remote areas.


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Policy: A ofIndia

Parks set up in selected locations in the four and in Pune, Hyderabad, and

several other cities. In these parks, other infrastructure facilities, such as, buildings, and electricity

were made available easily. Previously, such high-speed data links were not available.

for establishing high-speed data links for software been simplifiedby dovetailing and

coordinating the activities of various telecom organisations.

24.4 AND

SUGGESTIONS

following aspects of telecom policy need serious and joint efforts to improve the effective

functioning of the

Telecom Sector: Need Model Building

There is an urgent need to assess the demand for telecom services under a variety

governing delivery of such services. In this context, appropriate models need to be developed,

which could be drawn from the successful experiences of other countries.

It is evident that India's 125million-strong telephone network, including mobile phones, isone ofthe largest in the world. Even then the telephone penetration rate continues to be low at about

1.32phones per hundred populations (Economic Survey, 2005-06). However, there are vastfor growth, and the end of 2007 targets the total of phones to reach 250million.

In this regard, major policy initiatives in the telecom sector are highlighted in table 24.1 .The telecom

sector in India needs whole-hearted the for of services

under a variety of pricing, and network expansion. In this context,government political will are required for reforms; attaining desired

objectives; and developing robust for forecasting the demand in telecorn sector

subsequent planning of how these services be delivered effectively. An in-depth analysis ofneed clarity on required type of will contribute in estimating

delivery mechanisms and the required resources. addition, public debate on sensitive issues will

also contribute to in policy-making and effective of policies.

Issues in Financing: Increasing Investments

policies on pricing, revenue sharing, coinpetition, financial and tax

regimen influence of ofa private investor. In this regard experiences ofother countries, which had raised finances, need to be explored by policy-makers to raise capital,and provide incentives improve overall functioning of the organisation. Urban

may reach averages, in case the constraints on availability are overcome

and prices are kept low through investment competition.New products and ways of providing telecom services are emerging with rapid research and

in Therefore, there is a need to develop an accurate mode to

evaluate the proper utilisation of investments, operating costs, quality, accessibility. As India

expects to spend a large telecommunications efforts should be

made to develop appropriate skills a s well as to provide adequate resources for technology

development,

telecom investors can hope to returns only in the long There is a need to buildmodels, which will factor-in all the market and policy to calculate ,

on investments.Inaddition, new personnel shouldbetrainedandproper of existing personnel

is to manage the finances and expansion of the telecom network.


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24.4.3 Technology Transfer and Development: Policy Issues

Serious efforts and capabilities are required to introduce innovative approaches in field of

technology and development.Smartphones should be made available at affordable prices, which

can handle e-mail, instant messages, web pages and data.

There is an urgent need to harness technical expertise within an institutional which is

dominated by generalist bureaucrats, and establish sustainable and responsive high tech

organisations; review thepolicies on pricing of leasedlines, availability of leasedlines, and limitations

on interconnection different networks of service providers; strengthen data

communication infrastructure,andmake it user-friendly.

C-DOTcan do wonders in R D activities. In the area of technologies,C-DOTand Bell Labs (the research and development of Lucent Technologies)should be encouraged

to work together in the field of new generation technologies.

24.4.4 Service Provision: Delivery Mechanism and Regulation

The next dimension of Id relate to the nature of institutional

to augment telecom services, and subsequently deliver these services.Incase of operators,

the must ensure that their conditions for service provision based on sound

principles while at the time ensuring optimal service to customers.

The government needs to ensure that alltheIndian users have easy access to the latest technology,

as often such technology is cheaper and better than the existing one. To and provide

desired services, training programmes should be organised for officials to enable tounderstand the fact that demand can becreated through better service, which adds value. In thisway officials should be prepared to view their business from the consumer perspective,

content and applications are important constituents for overall growth of Internet and

broadband services in India. Itis to be noted that the broadband serviceswillhave the potential to

the rural areas if various governmental agencies, local authorities, and the private

sector pull together in working out appropriate strategies.

TelecomPolicy:Implications

As is moving from a closedeconomy to acornpetitive economy, intensive monitoring, detailed

plans, and guidelines to ensure fair access to the network need to be

systematically in the planning process. However, the rural densities need to be projected after

analysis of existing demand patterns.

A well-definedstrategy is crucial to implement telecom policiesinan efficient and effective manner.

A policy for training and educating workforce in technical and managerial aspects,software design and maintenance, and service development has to be addressed properly in the

telecom policy. The approach to needs to be carefully worked to achieve the

desired goals. However, policy-making committees consist of professionals from a wide

range of fields tostrengthen the of telecom policy design, and implementation.

To achieve desired goals the telecom sector needs easy access to capital, skilled manpower and

new In this regard,funds sources, either through partial orwill have to be obtained for hefty on acontinuing basis.

To meet thecompetition with private agencies, introduction of new products and service innovation

shou Id be in the basic andvalueadded servicesand by In addition,

tomaintain efficiency and profitability in the changing scenario, policy, especially in marketing,


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Policy: A ofIndia 325

usage and ownership of datacom channels and other telecom services needs to be

continuously.

the policy-makingstrategy, a coherent technologytransfer policy can play a positive

role between foreign collaborators and internal units in technical development. It will ensure

availability of latest technology at reasonable prices. In this regard, the Telecom

work as an enabler and catalyst in the change process.

India witnessed a silent revolution in the telecom sector in less than a decade. The monopoly of

public sector was dismantled, the outcome of the policy change led to highly beneficial results.

This had very few parallels in other sectors in which liberalisation and have beenushered. The private players in the telecom sector displayed unusual and in

significant investments. The efforts of the and that of the sector a great

deal of congruence in advancing the interests of the customers. hasalso been playing its role

as a regulator in a befitting by promoting competition among service providers in the

interests of the consumers of service.

24.5 CONCLUSION

In this Unit, the first part thetelecompoliciesin India. It dealt with in

sector through telecom policies, especially NTP 1994, NTP 1999 and Broadband Policy 2004.

NTP1999 modified the provisionsof 1994 take into account far-reaching technological

taking place in the telecom sector globally and to implement the government's

to India a global The underlying theme of this policy was to usher

in competition through unrestricted entry of private players in all service sectors. As a resultof

implementation of telecompolicies the telecomsector been witnessing an maz in g change,

terms of coverage and efficiency of services offered.

The second part the Unit analysed the changes introduced since 1999,and their impact on the

telecom sector. The impact of policies and of was assessed in of

telecompenetration. The data reveals that about 10 per cent of citizens own wireless phones in

India. However; the subscriber base crossed the figure of in May 2006.

According to the TRAI report, which was released in January 2006, India added more than4.5subscribers each month. In addition, these are about5crore connections in India,

resulting in a total telecom penetration level of about per cent. 2006)

Last but not third part of the Unit attempted to assess the current and future scenarios and

suggested policy changes and other measures to improve the sector, especially to achieve

the desired objectives through effective policy planning and implementation.

CONCEPTS

Access Network It is a wireless or wire line network that provides direct connectivity to a

corporate building or for an enduser's house from the service provider's

system. Thus, it provides direct linkto any part ofthe country through

the backbone network of the

ADSL : An MODEM is a Broadband Internet access device, whichthe high frequency ofthe phone line to data

without the voice transmission,Itis tobenoted theoftheADSLsignal ishigher than that of voice, so voice and ADSLsignalcan co-exist inone line by using splitter to insulate each from the other.


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Broadband : In broadband refers to a signal or circuit, which

includes or handles arelatively wide range of frequencies.It is a relative

term, understood according to its context. In data communications, a

modem will transmit a bandwidth of64 per secondovera telephone line; over the same telephone line a bandwidth of several

megabits per second can be handled by ADSL, which is described as ,

broadband.

Broadband

ConnectivitySpectrum

Teledensity

: It has been defined as"Always on"with minimum speed of256

: It is a scarce natural resource, which needs to be allocated in ways that

its economic value. The recent trend in is

towards mobility, for which radio frequency spectrum is one of the

essential ingredients.

: It is the number of telephones in use for every 100 individuals

living within an area.A teledensity greater than 100 means there are

telephones than people in the specified area.

REFERENCES ANDFURTHER READING

G,, 2001,"Telecom Regulatory As a Key to Network growth in the Indian

Context: AnEconomic Perspective", IIPA, New Delhi

gearing up to offer satphones in14villages", The Times, 20 June, 2006, New

Today, Annual issue2005,Wind Rover, Bangalore.

Manoj,"C-DOT likely to tie up with Bell for new technologies",The Econonzic

28 April, 2006,New Delhi.

Gairola, "Telcos may bear new FDInorms soon", The Economic Times,12New Delhi.

Government of India, Reports, Department of

New Delhi.

Governmentof Annual Report, Telecom Regulatory AuthorityofIndia, NewDelhi.

GovernmentofIndia, of Finance, Economic Division,Economic Survey, 2005-2006.

Government ofIndia, Report of the High Level Committee on Reorganisation of

Department, March 1991.

Government of India, The Telecorn Regulatory Authority of Act,1997 [As Amended by

(Amendment) Act,

Goyal, Surabhi, "Broadband A Changing Face of India, The Indian Journal of Public

October-December, 2004, IIPA, New Delhi.

Jain, Rekha,"A Review ofTelecom Regulatory Authority of India's Tariff and Inconnection .

Regulation", 2004, India Infrastructure 2004 Ensuring Value for Money, Oxford

UniversityPress,NewDelhi.

I


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Policy: A Case 327

Jain, Rekha,"Review of Policy Changes in the Indian Telecom Sector", Indian Institute of

Management, at

and "Pricing of Services to and the Need for Competitive

Market: A Case of India's Telecom Sector",The JournalJanuary-March 2006,IIPA,New Delhi.

Pratap, plans to provide ICT services", Economic 13 June 2006,

New Delhi.

M.,"Consultant to help in for connect", May 2,2006,New Delhi.

M., but China runs", June 8,2006, New Delhi.

Sanchita,"Vision goes hi-tech in Tamil Nadu", Times,June 8,2006,New

growth good, Challenges 28,2006, New Delhi.

"The C-DOTBaby Matures", Teleinatics September, 1992.

"What's New in the Market", 2006, 7 No.

24.8 ACT

1) two Public Sector Undertakings, that is, BSN L and MTNL, have been losing theirshares in fixed the above statement on basis of your study

observation.

2) Critically evaluate the impact ofBharat Yojana, especially in the context of

telephony. Cite examples of social and economic impact of 11011-availabilityoftelecom servicesin a area.

3) Explain the behind the significant growth in broadband connectivity within a shoretime.

4) Review the telecom policies,and highlight the on increase in operationalefficiency.

Unit-24 Telecom Policy a Case Study of India

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