‘One Nation, One License’: Center sets for a fresh policy

Context:

• The government has started framing a new telecom policy by the end of December, 2017.
• The Centre will consider including a ‘one-nation one-license’ regime in the new telecom policy.

India’s telecommunication network:

India’s telecommunication network is the second largest in the world by number of telephone users (both fixed and mobile phone).

• Major sectors of the Indian telecommunication industry are telephone, internet and television broadcast industry.
• It has one of the lowest call tariffs in the world enabled by mega telecom operators and hyper-competition among them.
• India has the world’s second-largest Internet user-base. As on 31 March 2016, there were 342.65 million internet subscribers in the country.

National Telecom Policy 2012:

• The National Telecom Policy, 2012 was approved by the Union Cabinet on May 31, 2012.

Its mission:

1. To develop a robust and secure state-of-the-art telecommunication network providing seamless coverage with special focus on rural and remote areas for bridging the digital divide and thereby facilitate socio-economic development.
2. To create an inclusive knowledge society through proliferation of affordable and high quality broadband services across the nation.
3. To reposition the mobile device as an instrument of socio-economic empowerment of citizens.
4. To make India a global hub for telecom equipment manufacturing and a centre for converged communication services.
5. To promote Research and Development, Design in cutting edge ICTE technologies, products and services for meeting the infrastructure needs of domestic and global markets with focus on security and green technologies.
6. To promote development of new standards to meet national requirements, generation of IPRs and participation in international standardization bodies to contribute in formation of global standards, thereby making India a leading nation in the area of telecom standardization.
7. To attract investment, both domestic and foreign.
8. To promote creation of jobs through all of the above.

It’s objective:

• The primary objective of NTP-2012 is maximizing public good by making available affordable, reliable and secure telecommunication and broadband services across the entire country.
• It recognizes the role of such services in furthering the national development agenda while enhancing equity and inclusiveness.
• Availability of affordable and effective communications for the citizens is at the core of the vision and goal of the National Telecom Policy – 2012.
• NTP-2012 also recognizes the predominant role of the private sector in this field and the consequent policy imperative of ensuring continued viability of service providers in a competitive environment.
• Pursuant to NTP-2012, these principles would guide decisions needed to strike a balance between the interests of users/ consumers, service providers and government revenue.

Current challenges to the telecom industry:

• The tax rate after GST is now 18 percent from the previous 15 percent resulting in a load over the telecom sector which is already under financial burden.
• The next issue in sight is that, the telecommunication firms currently works for area or circle wise service.
• But generating a state-wise revenue will result a large number of IT firms and accounting systems, and will need a great increment in compliance effort, multiple audits, multiple assessment, and a chain impact of taxes on account of credit blockages in each and every state.
• Telecom sector of the country is the second largest diesel consuming sector after railways. If petroleum products remain outside the GST bill then it will be very difficult for tower companies to set of their input liabilities.

Current government initiative:

• The government has got down to the job of framing the new telecom policy by the end of December, 2017.
• The new National Telecom Policy will focus on areas such as Internet for all, next-generation technologies (like 5G and Internet of Things), skill development and security, among others.
• The Centre will consider including a ‘one-nation one-licence’ regime in the new telecom policy.
• The move is likely to remove the distinction between local and STD calls, as service providers will not need separate licences for operations in various parts of the country. A single licence would be sufficient.
• Department of Telecommunication plans to go for a wide consultation and outreach before finalizing the new policy and expects to have it in place by March 2018.

Need for a new policy:

• The new policy formulation is needed for the telecom sector is saddled with financial difficulties.
• Revenue and profitability of both large and small operators have come under severe pressure after the entry of aggressive competition.
• The telecom industry’s debt has touched 6 lakh crore, and a latest report by rating agency ICRA has warned that industry revenue will plunge another 6 per cent in the current financial year due to competition and pricing pressure.
• Under the NTP 2012, the Telecom Ministry has issued technology-neutral telecom licences, which was delinked from spectrum.
• The new policy also looks down upon finalization of spectrum trading and sharing rules, full mobile number portability, increasing spectrum supply for the industry, Right of Way norms and e-KYC.
• Thus, these problems are more than enough to formulate a new policy.