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India’s New Telecom Policy 2012: What’s Changed? Additions & Omissions

Earlier this month, the Union Cabinet had approved the National Telecom Policy (NTP 2012) with a few changes and additions to the original draft of the New Telecom Policy, introduced by Department of Telecommunications (DoT) in October 2011. This policy will replace the existing telecom policy formulated in 1999 and define the general direction that telecom policy in the country is expected to take. There are differences between the initial and final policies:

Change in Objectives: The draft NTP Policy had suggested direct revenue generation as its secondary objective, however the government seems to have shot down this objective, replacing it with ‘availability of affordable and effective communications for the citizens’  which the finance minister said will be the goal of National Telecom Policy – 2012 and the core of the policy’s vision.

Policy Additions

The government has added a number of guidelines to the the draft telecom policy. These include:

– Provide appropriate incentives for rolling out reliable and affordable broadband access to rural and remote areas: DoT had earlier proposed to lay special emphasis on providing reliable and affordable broadband access to rural and remote areas by a combination of optical fibre, wireless, VSAT and other technologies,which were to be funded from the Universal Service Obligation Fund (USOF) while the access to Optical Fibre Network was proposed to be open, non-discriminatory and technology neutral. DoT had also encouraged Fibre To The Home (FTTH) with enabling guidelines and policies and had suggested the creation of an institutional framework to co-ordinate with different government departments for laying of telecom cables including Optical Fibre Cable networks.

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–  Launch secure transactional services including online authentication of identity and financial services by leveraging mobile devices and SIM cards with enhanced features.

– To promote R&D, design, development and manufacturing in the domestic telecom equipment manufacturing, provide appropriate fiscal incentives to telecom equipment manufacturing through a Modified Special Incentive Package Scheme (M-SIPS) and to Indian product manufacturers for domestic deployment and exports. The policy also intends to implement a stable tax regime for telecom equipment manufacturing.

Approving MVNOs (Mobile virtual network operators):  The policy intends to facilitate resale at the service level in both wholesale and retail, by introducing virtual operators while ensuring due compliance with security and other license related obligations.

– The government intends to establish and strengthen Institute of Advanced Radio Spectrum Engineering and Management Studies (IARSEMS) to undertake policy research in radio spectrum engineering, management/radio monitoring and related aspects as a government agency.

– It also intends to strengthen and develop National Telecom Institute for Policy Research, Innovation and Training (NTIPRIT) to enable research in India centric technologies and policies in telecom domain, capacity building and set up a comprehensive repository in NTIPRIT for distributing telecom related information, standards, benchmarks, resources, and program curriculum.

– The government will also establish a National Mobile Property Registry to address security, theft and other issues likes reprogramming of mobile handsets and create an appropriate regulatory framework to provide a reliable means of public communication by Telecom Service Providers during disasters while strengthening the regulator to ensure telcos comply with the prescribed performance standards and Quality of Service (QoS) parameters.

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– It seeks to appropriately consider restructuring of the Public Sector Undertakings, under the Department of Telecommunications, with respect to management, manpower and equity and recognize strategic importance of Telecom PSUs in nurturing/enhancing Government’s intervention capabilities in matters of national security or international importance, including execution of bilateral projects funded by Government of India.

– To recognise and enhance the opportunities available through/within Telecom PSUs for deployment of indigenously developed Telecom products, with Indian IPR, to provide vital support for domestic manufacturing of Indian Telecom products in the long run.

– To formulate appropriate policies in the area of enterprise and data services to fuel further growth of India’s ICTE sector and attract investments.

– The policy also intends to take requisite measures to strengthen various DoT units when necessary, to achieve the objectives of this policy as well as operationalize the policy by bringing out detailed guidelines, when appropriate. It also intends to take suitable facilitatory measures to encourage existing service providers migrate to the new regime in a level playing field.

Policy Omissions

While the government has retained majority of the proposals made by DoT in the draft New Telecom Policy, there are a few omissions in the final NTP 2012 policy. These include:

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– To make best use of spectrum in line with technological advancement and to establish an appropriate regulatory framework for progressive liberalisation of spectrum utilisation to make spectrum utilisation voice/data/video neutral.

– The draft telecom policy had proposed to strengthen the Wireless Planning & Coordination (WPC) wing and Wireless Monitoring Organisation (WMO) and promote designing and deployment of low power active radio devices and reliable and resilient communication networks.

– The policy draft had also proposed a separate Spectrum Act which inter-alia deals with all issues connected with wireless (spectrum) licences and their terms and conditions including re- farming/ withdrawal of allotted spectrum, spectrum pricing, cancellation or revocation of spectrum licence, exemptions on use of spectrum, spectrum sharing, and spectrum trading.

Our detailed coverage of the NTP and our take on the recommendations: 

India’s New National Telecom Policy Approved; Unified Service Licenses, Intra-Circle MNP, Spectrum Reforms
– Draft New Telecom Policy 2011: Broadband Related Provisions & Issues Not Addressed
– India’s Draft New Telecom Policy 2011: The Policy That Could Change India’s Digital Business Forever
– India’s Draft National Telecom Policy 2011: What’s In It For Startups, Content & Service Providers
– India’s Draft National Telecom Policy 2011: On Licensing, Regulation, Convergence, Spectrum And Manufacturing
–  National Telecom Policy (Download, pdf), Draft of the New Telecom Policy (Download, pdf)

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