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NTP 2018: A Defining Moment for the Indian Telecom Sector

As technology evolves, the policy environment must also keep pace with it so that all citizens get secure access in this dynamic environment. The Government has been regularly announcing telecom policies towards achieving this goal. Thus far, we have seen four such policies – National Telecom Policy 1994 (NTP94), National Telecom Policy 1999 (NTP99), Broadband Policy 2004 and NTP2012. Now, it’s time for the next phase of communications services in India – the NTP2018.

Each NTP document has left a lasting impression and can be considered the reason behind the phenomenal success of the telecom sector in the country over the last two decades. The latest NTP 2018 is yet another opportunity for the Government to bring in the fundamental changes the telecom sector needs. Given that the sector provides a service essential to India’s growth, the new policy must encourage investments and ensure its financial stability. Several current levies & taxes need to be rationalised and multiple audits must be done away with to ensure India’s leap into the next level of socio-economic growth.

At this time, the telecom industry is in a downward spiral. Cumulative debts amounting to around INR 4.6 lakh crore on revenues of under INR 1.8 lakh crore are forcing the industry to question the long-term prospects and viability of the sector. The industry has suggested a number of options to the telecom regulator when it was conducting the consultation process, including reduction of Spectrum Usage Charge to a uniform 1% (of AGR) and create a Telecom Finance Corporation as a vehicle to mobilize and channelize financing. In terms of operational changes, the sector has been pushing hard seeking resolution of a number of issues, including ease of doing business, data privacy, network security, manufacturing and skill development. These would immensely help in the creation of an investor friendly environment and help boost foreign investments.

Other submissions included that the USO fund contribution be rationalised to 3% and ultimately be done away within 2-3 years. It could also be kept in abeyance till the remaining amount gets disbursed. The financial health and longer term sustainability of the sector are paramount, without which, there can be no futuristic technologies.

Also, Telcos have long been complaining about the fact that 30 paise of every rupee earned by telcos is goes away as fees and taxes to the government and this is one of the key reasons for the industry’s Rs 4.6 lakh crore debt. The Department of Telecommunications wants mobile phone operators to be sustainable enough to invest cash into their business and work together with the Government to connect over 1 billion people to the internet. After all, for every 10% increase in Internet penetration for a country like India, GDP is projected to grow between 1-4%. Hence, reviving the sector by enabling existing players to earn profit as well as driving foreign investments to boost the overall infrastructure seems to be at the top of the calendar, right now, via this NTP.

The telecom regulator has released detailed suggestions for NTP-2018, with many of industry’s recommendations included. We are happy that the regulator has considered most of the suggestions and has also released a set of objectives, along with specific timelines to achieve them.

NTP 2018 should also take into account future technologies such as 5G. 5G network is envisaged to accommodate Applications and Services with different latency, reliability and bandwidth and would require effective sharing of network resources and network management techniques. The Government needs to come out with a policy to see that these technological initiatives and innovations are facilitated effectively.

We hope that a level playing field and regulatory equality would be maintained amongst telecom players. The industry has therefore called for the creation of a stable, predictable, innovation & investment friendly regulatory and policy environment.